Performing a Post-Audit Is Important Because

question 65

Multiple Choice

Performing a post-audit is important because

• A) managers will be more likely to submit reasonable data when they make investment proposals if they know their estimates will be compared to actual results.
• B) it provides a formal mechanism by which the company can determine whether existing projects should be terminated.
• C) it improves the development of future investment proposals because managers improve their estimation techniques by evaluating their past successes and failures.
• D) all of these.

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Definitions:

Futures Contract

A financial contract obligating the buyer to purchase, and the seller to sell, a particular asset at a predetermined future date and price.

Hedger

An individual or entity that enters into a financial contract to mitigate the risk of adverse price movements in an asset.

Swap Contract

A financial agreement where two parties exchange liabilities or cash flows from two different financial instruments for a set period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date.