Why Are Excessive Accruals a Concern for Accounting and Financial

question 15

Multiple Choice

Why are excessive accruals a concern for accounting and financial reporting?

• A)They improve the quality of earnings of the company.
• B)They may represent unethical practices by the company.
• C)They require too much professional judgment.
• D)They result in standards overload.

---

Definitions:

J-curve

An economic theory describing a country's trade balance that initially worsens following a depreciation of its currency but then improves beyond its original level.

Social Unrest

A situation where a significant number of people in a community express dissatisfaction with socio-political conditions, potentially leading to protests or violence.

Collective Action

The action taken together by a group of people whose goal is to enhance their status and achieve a common objective.

Social Protest

A collective action or demonstration expressing opposition to, or support for, a cause, policy, or set of conditions.