A(n) _________ Problem Occurs When a Person or Institution Does

question 3

Multiple Choice

A(n) _________ problem occurs when a person or institution does not have to bear the full consequence of its behavior and therefore assumes more risk than it otherwise would.

• A)asymmetric information
• B)moral hazard
• C)risk adjustment
• D)specific hazard

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Definitions:

Internal Control

Approaches and techniques employed by a business to protect the veracity of accounting and financial information, foster answerability, and inhibit dishonesty.

Cash Receipts

Money received by a business from transactions, including sales, loan proceeds, or other cash inflows.

Control Measures

Actions, mechanisms or policies implemented to regulate processes and diminish risks.

Sarbanes-Oxley Act

A United States federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.