The CEO of High Tech International Decides to Change an Accounting

question 114

Multiple Choice

The CEO of High Tech International decides to change an accounting method at the end of the current year.The change results in reported profits increasing by 5%,but the company's cash flows are not changed.If capital markets are efficient,then

• A) the stock price will not be affected by the accounting change.
• B) the stock price will increase due to higher profits.
• C) the stock price will increase only if the accounting change will also result in higher profits in the next year.
• D) the stock price will decrease because accounting method changes are not permitted under generally accepted accounting principles.

---

Definitions:

Conflict Style

Refers to an individual's preferred way of responding to and handling conflict, which can range from avoidance to confrontation.

Conflict

A disagreement or clash between individuals or groups due to differing views, values, or interests.

Relationship Conflict

Disagreements and incompatibilities between individuals or groups, often involving personal issues, interests, or values rather than task or goals.

Constructive Debate

A constructive debate is a discussion aimed at finding solutions or improvements, characterized by respectful and productive dialogue.