Financial Scandals Around the Turn of This Century at Enron,WorldCom,Adelphia,HealthSouth,and

question 27

Multiple Choice

Financial scandals around the turn of this century at Enron,WorldCom,Adelphia,HealthSouth,and others led to which of the following?

• A)Greater reliance on nonstandard accounting practices
• B)Less reliance on nonstandard accounting practices
• C)New laws and governmental rulings that limit business's discretionary actions
• D)Revocation of laws and rulings that limit business's discretionary actions

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Definitions:

Indirect Ownership Interests

Ownership in a company that is not held directly by the owner but through a chain of intermediary entities.

Sequential Consolidation Method

A process in accounting where the financial results of subsidiary companies are consolidated with the parent company's financial statements one after another, usually in the order of acquisition.

Sequence of Consolidation

The order in which different financial statements are combined during the consolidation process of a group of companies.

Total Parent Ltd Interest

The total interest held by the parent company in a subsidiary, including both direct and indirect holdings.