Which of the Following Is NOT One of the Major

question 78

Multiple Choice

Which of the following is NOT one of the major safeguards in the financial reporting process?

• A) Earnings management
• B) Internal controls
• C) Internal auditors
• D) External auditors

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Definitions:

Output Effect

The change in total output resulting from adjusting production levels, typically in response to changes in market demand or cost of production.

Fixed Proportions

A production process where inputs must be used in specific proportions, and the ratio of inputs cannot be easily changed.

Substitution Effect

The change in consumption patterns due to a change in relative prices, causing consumers to substitute one good for another more price-friendly option.

Marginal Productivity

The extra output that is produced by using one more unit of a factor, keeping all other factors constant.