The SEC Interpretive Guidance "Management's Report on Internal Control Over

question 117

True/False

The SEC Interpretive Guidance "Management's Report on Internal Control Over Financial Reporting" approved in 2007,focuses management on internal controls that best protect against risk of material misstatements in financial statements.

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Definitions:

Cumulative Dividends

Dividends on preferred shares that accumulate and must be paid out before any dividends can be distributed to common shareholders.

Consolidated Cost

The total cost that combines figures from various subsidiaries of a parent company into one aggregated total.

Unrealized Inventory Profits

Profits that result from internal sales within a company or conglomerate but have not been realized through sales to external parties.

Significant Influence

A level of control that an investor has over a business entity, typically through ownership of a significant but not majority share of voting stock.