Which of the Following Statements Is Not True with Respect

question 1

Multiple Choice

Which of the following statements is not true with respect to the proposed Basel II Accord?

• A)Basel II provides an incentive for banks to reduce their operational risk.
• B)The Accord provides for an alternative method of calculating credit risk in the form of the internal ratings-based (IRB) approach.
• C)Basel II should encourage banks to use more aggressive management.
• D)The Basel Committee defines operational risk as the risk of losses resulting from inadequate or failed internal processes or systems.

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Definitions:

IFRS

International Financial Reporting Standards are a set of accounting guidelines that govern how companies prepare and present their financial statements internationally.

Income

The money received, especially on a regular basis, for work, through investments, or from business activities.

Gains

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases in liabilities.

GAAP

GAAP, which stands for Generally Accepted Accounting Principles, is a set of accounting standards and conventions that guide how financial statements are prepared and reported.