Management's Attitude Toward Aggressive Financial Reporting and Its Emphasis on Meeting

question 11

Multiple Choice

Management's attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity's control environment when

• A) External policies established by parties outside the entity affect its accounting practices.
• B) Management is dominated by one individual.
• C) Internal auditors have direct access to the board of directors and the entity's management.
• D) The audit committee is active in overseeing the entity's financial reporting policies.

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Definitions:

Dual-Center Theory

The hypothesis that one area in the lateral hypothalamus is the “on” center, the initiator of eating, while another area in the ventromedial hypothalamus is the “off” center, the terminator of eating. Current evidence indicates that although these brain regions are crucial for eating, the regulation of eating also involves other circuits.

Lateral Region

An area situated at the side of an organ or structure within the body.

Hypothalamus

A small but crucial part of the brain's limbic system, involved in many functions, including hormone regulation, temperature control, and management of hunger and thirst.

Leptin

a hormone produced by fat cells that helps to regulate energy balance by inhibiting hunger.