Two of the Firms Involved in the Accounting Scandals of the Early

question 224

Multiple Choice

Two of the firms involved in the accounting scandals of the early 2000s were

• A)Arthur Anderson and NBC.
• B)Western Digital and General Motors.
• C)WorldCom and Enron.
• D)DuPont and Lehman Brothers.

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Definitions:

Large Corporations

Businesses that operate on a large scale, often with extensive operations, significant revenues, and a large number of employees.

C-type Corporations

Standard business corporations subject to corporate income tax, distinguished by their taxation at both the corporate and shareholder levels when dividends are distributed.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.

Agency Problem

A conflict of interest arising between decision-makers (agents) and the owners (principals) due to differing goals.