Arguments Against the Regulation of Accounting Information Include

question 17

Multiple Choice

Arguments against the regulation of accounting information include:

• A) Mandated disclosures are cheap to provide and by their nature will devalue the worth of the information being provided.
• B) By making so many choices of accounting methods available under the standards, the efficiency with which the information is provided will be enhanced.
• C) Companies will be motivated to disclose good news but not disclose bad news if they are not forced to make certain mandated disclosures (the 'lemons' argument).
• D) Managers of the organisation are in the best place to determine what information should be produced to increase the confidence of external stakeholders.

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Definitions:

Thalamus

A structure in the brain that acts as a principal hub for processing and relaying sensory information to the appropriate areas of the cortex.

Volley Principle

A theory in neuroscience that describes how groups of neurons can generate a higher frequency of nerve impulses than any one neuron could produce on its own, often applied to explain aspects of auditory processing.

Place Theory

A theory in psychology and audiology suggesting that the perception of sound frequency depends on the location of the maximum vibration on the cochlea's basilar membrane.

Frequency Theory

A theory that suggests the rate at which auditory nerves fire is tied to the frequency of an auditory stimulus, helping to identify the pitch of sounds.