If an Incentive Contract Specifies Certain Accounting Performance

question 52

Multiple Choice

If an incentive contract specifies certain accounting performance,

• A)that accounting number will likely be the focus of managers.
• B)managers will set aside the accounting goal if it conflicts with the goal of maximizing shareholder wealth.
• C)managers will be unable to manipulate the GAAP,so shareholders can be confident of having their wealth maximized.
• D)none of the options

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Definitions:

Liberal Views

Political and social attitudes that emphasize the importance of individual rights, equality, and support for social and political change towards more freedom and inclusiveness.

Quid Pro Quo

A Latin term meaning "something for something," describing an agreement where goods, services, or favors are exchanged between parties.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that can affect a person's employment or work environment.

#MeToo Movement

A social movement against sexual harassment and assault, advocating for victims and promoting accountability for perpetrators, starting in social media.