Compare and Contrast Ethics Auditing and Financial Auditing

question 27

Essay

Compare and contrast ethics auditing and financial auditing. How can the tools of financial auditing be applied to ethics audits?

Appreciate the significance of vigilant investors and investment fund managers in the efficient operation of an economy.

Analyze how interest rates affect stock market values and the reasoning behind these effects.

Understand the advantages of indexed equity mutual funds over managed equity funds.

Explain the random walk theory of stock prices and its implications for stock market investors.

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Definitions:

Prisoner's Dilemma

A fundamental problem in game theory that demonstrates why two rational individuals might not cooperate, even if it appears that it is in their best interest to do so.

Dominant Strategy

A strategy in game theory that is best for a player, regardless of the strategies chosen by the other players.

Maximum Profits

The highest amount of earnings achievable by a firm when marginal costs equal marginal revenue.

Cartel

A group of producers or vendors coming together to keep prices elevated and limit competition.