Which of the Following Is True Regarding Revelations Involving Enron

question 66

Multiple Choice

Which of the following is true regarding revelations involving Enron and WorldCom?

• A)That their upholding of high ethical standards in regard to accounting practices supports the conclusion that the business world should be allowed to regulate itself.
• B)That although illegal accounting practices occurred,it is so difficult to find and regulate such practices that any regulation should be left to the free market.
• C)That accounting issues with these companies illustrate that the business world cannot be allowed to regulate itself ethically and that government oversight is needed.
• D)That WorldCom,a privately held company,had high ethical standards but that Enron,a publicly traded company,engaged in illegal accounting practices supporting the conclusion that privately held companies should be allowed to regulate themselves whereas publicly held companies need significant government regulation.
• E)That WorldCom,a privately held company,engaged in illegal accounting practices but that Enron,a publicly traded company,had high ethical standards supporting the conclusion that privately held companies need significant government regulation whereas publicly held companies should be allowed to regulate themselves.

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Definitions:

Tort Law

The area of law that deals with civil wrongs, not arising from contracts, which can be redressed by awarding damages.

Restitution

The act of restoring something to its original state or compensating for loss or damage; in law, it usually refers to the compensation for harm or injury.

Incidental Damages

Expenses reasonably incurred by one party due to another party's breach of contract, such as costs to mitigate damages or to obtain substitute performance.

Arise Directly

Refers to issues or consequences that occur as a direct result of an action or event, with no intermediary steps.