When an Accountant Does Not Report All of the Potentially

question 67

Multiple Choice

When an accountant does not report all of the potentially relevant financial information on the firm's financial statements, the accountant is most likely:

• A)Hiding transactions from the shareholders
• B)Using the discretion that is built into GAAP
• C)Not following GAAP
• D)Not licensed to practice accounting

---

Definitions:

Situational Causes

Factors external to an individual that are viewed as causes for behavior.

Heuristics

Simplified strategies or shortcuts used to make decisions and solve problems more efficiently.

Castro Study

A reference to a classic study in social psychology that examined attitudes and persuasion, often associated with the elaboration likelihood model.

Fundamental Attribution Error

A cognitive bias that describes the tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of external factors.