Congress Passed the Sarbanes-Oxley Act in 2001

question 57

Essay

Congress passed the Sarbanes-Oxley Act in 2001.The act attempts to ensure that the firm's financial reports accurately represent its financial condition.However,general consensus thinks that accounting rules still give firms considerable leeway when preparing their financial statements.List three examples of gray areas that allow for judgment calls.

Identify the broad issues in receivables policy including criteria for credit, terms of sale, and handling of delinquent customers.

Comprehend the benefits and consequences of extending trade credit.

Understand the implications of credit policy on bad debts and accounts receivable performance (ACP).

Recognize the use of financial mechanisms to manage and optimize cash flow, like ZBAs and lockbox systems.

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Definitions:

Rewards

Benefits or positive outcomes that are given in response to an individual's actions or behaviors, often used as a form of encouragement or motivation.

Positions

The roles or rankings that individuals occupy within a social or organizational structure.

Social Psychologists

Researchers specializing in the scientific study of how people's thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Think

The process of using reason or mental faculties to consider ideas, make decisions, or reflect on various subjects.