Some Stakeholders Have Been Critical of Aspects of AASB 1023

question 33

Multiple Choice

Some stakeholders have been critical of aspects of AASB 1023 that introduce volatility into earnings.Why would increased volatility be considered undesirable?

• A) Increased volatility is associated with unreliable service and may lead potential policy holders to choose another company.
• B) It makes it more difficult for management to plan how to manage its profit levels.
• C) Volatile earnings make it more difficult for employees to argue for pay increases.
• D) Insurers may be put into technical default on contractual clauses relating to things such as debt covenants.
• E) None of the given answers.

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Definitions:

Schizophrenia

A severe mental disorder characterized by disordered thoughts, behaviors, and a loss of connection with reality.

Urinary Tract Infection

An infection in any part of the urinary system, including kidneys, ureters, bladder, and urethra, often caused by bacteria.

Stigma

A mark of disgrace or infamy; a sign of severe social disapproval of personal characteristics or beliefs perceived to be against cultural norms.

Chronic Incontinence

A long-term inability to control urination or defecation.