One of the Primary Goals of the PCAOB Is to Restore

question 4

Multiple Choice

One of the primary goals of the PCAOB is to restore confidence in which group?

• A)The SEC.
• B)Boards of directors.
• C)Internal auditors.
• D)Independent auditors.

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Definitions:

Operating Leverage

A measure of how sensitive a company's operating income is to changes in revenue.

Marginal Tax Rate

The rate of tax applied to the next dollar of taxable income, indicating how much tax will be paid on an additional dollar earned.

Operating Cash Flow

A measure of the cash generated by a company's normal business operations.

DOL

Degree of Operating Leverage, a ratio that measures how a company's operating income changes with a change in sales, indicating the effects of fixed costs on profits.