Which of the Following Is a Factor That Relates to "Incentives

question 17

Multiple Choice

Which of the following is a factor that relates to "incentives or pressures" to commit fraudulent financial reporting?

• A)significant accounting estimates involving subjective judgments
• B)excessive pressure for management to meet debt covenant requirements
• C)management's practice of making overly achievable forecasts
• D)high turnover of accounting,internal audit,and information technology staff

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Definitions:

Subsidiaries

Companies that are controlled by another company, known as the parent company, through ownership of more than 50% of the subsidiary's voting stock.

Deferred Tax Assets

Assets that represent the reduction of future tax payments due to deductible temporary differences, carryforwards, and credits.

Unrealised Intragroup Profits

Profits arising from transactions within a group of companies that have not yet been realized outside the group, often requiring elimination for consolidated financial statements.

Fair Value Adjustments

Adjustments to the reported value of an asset or liability to reflect its current market value.