The Use of Variable Interest Entities Increase Inherent Risks

question 28

Multiple Choice

The use of variable interest entities increase inherent risks:

• A) with respect to presentation and disclosure of shareholders' equity.
• B) when they are included in the client's consolidated financial statements
• C) except when authorized by the board of directors.
• D) as to the completeness assertions for investing and financing.
• E) with respect to the rights and obligations assertions for shareholders' equity.

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Definitions:

Norms

Attitudinal and behavioural uniformities that define group membership and differentiate between groups.

Internalised

The process of incorporating beliefs, attitudes, or standards into one's own value system or behavior.

Individual Self

The concept of oneself as a separate entity having unique thoughts, experiences, and abilities, distinct from others.

Empirical Evidence

Information that is acquired by observation or experimentation and serves as a foundation for knowledge in the scientific method.