Rebecca Works for a Company That Has Clearly Defined Lines

question 107

Multiple Choice

Rebecca works for a company that has clearly defined lines of authority. Each employee knows that he or she has authority and responsibility for a distinct set of tasks. Employees are also aware of the company's reporting structure as well as successive management levels all the way to the top. Rebecca's company follows which principle?

• A) Specialization principle
• B) Unity of command principle
• C) Scalar principle
• D) Authority principle
• E) Responsibility principle

---

Definitions:

Non-Adjusting Events

Events after the reporting period that do not provide new information about conditions existing at the end of the reporting period.

AASB 108

The Australian Accounting Standards Board standard outlining the procedures for making accounting policy changes, correcting errors, and making estimates.

Misstatements

A misstatement in financial information is an error, intentional or not, that causes financial statements to deviate from the true financial position, performance, or cash flows of an entity.