Post-Audits Create an Incentive for Managers to Make Accurate Estimates

question 117

True/False

Post-audits create an incentive for managers to make accurate estimates, since managers know that their results will be evaluated.

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Definitions:

Invest

To allocate money in the expectation of some benefit in the future, usually through the purchase of assets with the hope that they will increase in value.

Ordinary Annuity

Continuous uniform payouts effected at every period’s cessation over a stipulated time frame.

Compounded Quarterly

A method of calculating interest where the interest earned is added to the principal four times a year, leading to interest on interest.

Payments

The act of transferring money, or its equivalent, from one party to another as a settlement of an obligation, such as bills, invoices, or loans.