If Promotion and Monetary Rewards Hinge on Ratings, Management Can

question 2

Multiple Choice

If promotion and monetary rewards hinge on ratings, management can be affected by:

• A) The halo effect
• B) Leniency
• C) The lack of outcome focus
• D) The central tendency
• E) An interpersonal bias

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Definitions:

Financial Statement

A record that outlines the financial activities and condition of a business including balance sheet, income statement, and cash flow statement.

Misstatements

Errors or inaccuracies in financial statements that can arise from oversight or misinterpretation of financial information.

Omissions

Instances where information that should have been included in a document or conversation was left out, either intentionally or unintentionally.

Declining Balance

Declining balance is a method of accelerated depreciation in which an asset's book value is reduced at a faster rate in the early years of its life.