Enron and WorldCom Are Companies That Suffered from Large Frauds

question 74

Multiple Choice

Enron and WorldCom are companies that suffered from large frauds by corporate management.One important lesson with respect to such cases is that

• A)when a company does really well financially,it is important to suspect that such results are always inflated.
• B)an investigation of the integrity of management is an important part of deciding upon the extent of audit work.
• C)securities and exchange commissions expect auditors to be perfect in their assessment of management.
• D)partners and staff should cooperate in preparing working papers that prove the accuracy of the financial statements.

---

Definitions:

Hyperactive Children

Children who display excessively high levels of activity, often impulsive and with difficulty maintaining attention.

Stimulants

Substances that increase activity in the brain, leading to heightened alertness, attention, and energy.

Secondhand Smoke

Smoke from the tobacco products and exhalations of other people; also referred to as passive smoking.

Throat Cancer

A type of cancer that develops in the throat (pharynx), voice box (larynx), or tonsils.