Ann McMillan Is a CPA with a Public Accounting Firm

question 13

Multiple Choice

Ann McMillan is a CPA with a public accounting firm. A client of Ann's has called to tell her that the SEC is investigating the company for possible misrepresentations in the company's financial reports. Ann is worried that she may have pushed the envelope in allowing some of the revenues of the client to be reported as they were. Ann shreds several sets of notes from her meetings with the client on revenue recognition. Ann:

• A)is probably guilty of obstruction of justice.
• B)has done nothing wrong because the notes are privileged communication the SEC is not entitled to have.
• C)has not committed obstruction of justice because the SEC has not contacted her.
• D)None of the above

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Definitions:

Certainty Effect

The tendency for people to give greater weight to outcomes that are certain, compared to outcomes that are probable, often observed in decision-making under uncertainty.

Definite Outcomes

A term used to describe results or consequences that are clear, predictable, and unambiguous.

Probabilities

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.