The Audit Failures of Both Enron and WorldCom Were Examples

question 22

Multiple Choice

The audit failures of both Enron and WorldCom were examples in which the leadership responsibilities for quality work within the accounting firm were overshadowed by fears that losing a key client would

• A)result in shareholder losses from reduced company profitability.
• B)require additional audit procedures and increase the fees paid by the companies to the accounting firm.
• C)negatively influence the results of the firm's inspection.
• D)negatively impact individual auditors' performance evaluations.

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Definitions:

Quaternary

The most recent geological period, starting 2.58 million years ago and continuing to the present, characterized by ice ages and significant human evolution and development.

Extinction

The elimination of a species; occurs when the last individual member of a species dies; see background extinction and mass extinction.

Autotrophs

Organisms that produce their own food using light, water, carbon dioxide, or other chemicals.

Cyanobacteria

Photosynthetic microorganisms, also known as blue-green algae, that contribute significantly to the Earth's oxygen production.