Suppose a Management Accountant Becomes Aware That a Poor Judgment

question 22

Multiple Choice

Suppose a management accountant becomes aware that a poor judgment he or she made has resulted in the loss of one of the company's clients.Is the accountant bound to share this information with the company? (The accountant doubts that the company will ever find out about it directly. )

• A)The management accountant is bound to respond honestly to inquiries regarding the adequacy of professional judgments but is not bound to communicate them if not directly asked.
• B)The management accountant is bound to communicate this error in judgment only if another client cannot be found.
• C)The management accountant is not bound to communicate this error.
• D)The management accountant is bound to communicate unfavorable and favorable judgments made,even if not directly asked.

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Definitions:

Payment Plan

An agreement between a debtor and creditor that outlines how a debt will be paid off through scheduled installments over a period of time.

Order Of Relief

An order stating that bankruptcy proceedings can continue.

Voluntary Liquidation

The process initiated by a company's directors to voluntarily close down the business, sell its assets, and use the proceeds to pay off creditors before any remaining surplus is distributed to the shareholders.

Bankruptcy Estate

All legal or equitable interests of the debtor in property at the time of the bankruptcy filing, including all assets.