Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A)The Cadbury Commission stiffened the criminal penalties for providing false information to shareholders.
• B)The Exchange Acts of 1933 and 1934,among other things,established the Securities and Exchange Commission (SEC)and prohibited trading on private information gained as an insider of a firm.
• C)Many of the problems at Enron,WorldCom,and elsewhere were kept hidden from boards and shareholders until it was too late.In the wake of these scandals,many people felt that the accounting statements of these companies,while often remaining true to the letter of GAAP,did not present an accurate picture of the financial health of a company.
• D)While one study found that those firms that separated the position of CEO and chairman performed better,another found no relation between the independence of key board committees and firm performance in the post-Cadbury era.

Recognize the importance of the useful life and residual value in depreciation calculations.

Distinguish between financial accounting and tax accounting practices.

Recognize the costs included in the valuation of land and asset acquisition.

Understand the implications of property, plant, and equipment (PPE) on financial statements.

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Definitions:

1970s

Refers to the decade from 1970 to 1979, characterized by significant political, social, economic, and cultural shifts worldwide.

FOMC

The Federal Open Market Committee, which is the branch of the Federal Reserve responsible for overseeing the nation's open market operations and interest rates.

Government Securities

Financial instruments issued by the government to raise funds from the public, promising to pay back with interest.

Lender of Last Resort

An institution, usually a country's central bank, which offers loans to banks or financial institutions that are struggling to survive in order to prevent systemic failure.