Accountants Must Try to Protect the AIS from Threats

question 5

Multiple Choice

Accountants must try to protect the AIS from threats.Which of the following would be a measure that should be taken?

• A)take a proactive approach to eliminate threats
• B)detect threats that do occur
• C)correct and recover from threats that do occur
• D)All of the above are proper measures for the accountant to take.

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Definitions:

Retained Earnings

Retained earnings are the portion of a company's net profits that are kept within the company instead of being paid out to the shareholders as dividends. This reinvestment is often used for business expansion or to pay off debt.

External Financing Need

The amount of funding required by a firm to cover investments and growth not financed by internal cash flows.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and the ability to fund day-to-day operations.

Sustainable Growth Rate

The sustainable growth rate is a measure of how quickly a firm can expand its operations without needing to secure additional financing or significantly alter its financial structure.