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:

English

A West Germanic language originating from England, now the world's lingua franca in many sectors including commerce, science, and cultural exchange.

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The conduct of commercial transactions and activities across national borders, involving companies operating in multiple countries.

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Conduct that is ethical, considerate, and in adherence to workplace norms and policies.

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A prolonged look or stare directed towards someone or something, often indicating interest or scrutiny.