Interpublic Interpublic, the World's Third-Biggest Marketing Services Group, Informed the SEC

question 41

Multiple Choice

Interpublic
Interpublic, the world's third-biggest marketing services group, informed the SEC that it "had found accounting errors resulting from incompetence as well as falsified books and records, violations of the laws and company policies, and inappropriate customer charges" that required it to restate its earnings for every year in the decade. Interpublic is guilty of overstating both its expenses and its revenues in its earning reports. Interpublic blames its faulty revenue reporting on "inadequate procedures for review of customer contracts." This fraudulent activity will more than likely result in a default on the company's debt and the loss of its stock market listing.
-Refer to Interpublic. Which traditional management function was Interpublic not using effectively prior to its discovery of fraudulent activities?

• A) implementation
• B) goal-setting
• C) control
• D) suboptimization
• E) benchmarking

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Definitions:

Quality Assurance

A systematic process designed to determine if a product or service meets specified requirements.

Capital Acquisitions

The process of acquiring fixed, long-term assets that are intended to be used in the production of goods or services for generating future revenue.

Information Technology

The use of computers, storage, networking, and other physical devices, infrastructure, and processes to create, process, store, secure, and exchange all forms of electronic data.

Functionality

The range of operations that can be performed by a product or a system, especially in terms of its practical use and performance capability.