Internal Controls Are Crucial to Companies That Convert from U

question 21

Multiple Choice

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

• A)Possible misstatement of financial information.
• B)Possible fraud.
• C)Controls are significantly different across the globe.
• D)Ineffective communication of the change to investors,creditors,and others.
• E)Management's inability to certify the effectiveness of the controls.

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Definitions:

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.

Accumulated Other Comprehensive Income

A component of shareholders' equity that includes income not recognized in the profit and loss account, such as unrealized gains on securities and foreign exchange differences.

Shareholders' Equity

The residual interest in the assets of an enterprise after deducting liabilities, representing the ownership interest of shareholders.

Retained Earnings

The portion of net income that is kept by the company rather than distributed to its shareholders as dividends.