Which of the Following Is Not a Management Characteristic That

question 24

Multiple Choice

Which of the following is not a management characteristic that increases pressure to commit fraudulent financial reporting?

• A)Close relationship with the current audit engagement partner and manager
• B)Pay for performance incentives based on short-term performance measures
• C)High management and employee turnover
• D)Highly optimistic earnings projections

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Definitions:

Depreciation

The reduction in the value of an asset over time, particularly regarding tangible assets like machinery and vehicles.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees.

Opportunity Cost

represents the value of the best alternative foregone as a result of making a particular choice.

Accounting Costs

Represent the explicit costs or direct financial expenditures associated with the operations of a business.