Insurance Hypothesis Tells Us That

question 33

Multiple Choice

Insurance hypothesis tells us that

• A) investors will demand that financial statements be audited as a way of insuring against some of their loss should their investment fail.
• B) investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail.
• C) investors cannot insure themselves against loss when investing in an entity.
• D) the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements.

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Definitions:

Self-Observations

The process of intentionally focusing attention on one's own thoughts, emotions, and behaviors to gain insight or promote self-awareness.

Worker Observations

The act of noting or recording the behaviors, practices, or conditions of employees within a workplace.

Triangulation

In research or data analysis, the use of multiple methodologies or perspectives to arrive at a more comprehensive understanding or to validate findings.

Family Therapy

A form of psychotherapy that seeks to reduce distress and conflict by improving the systems of interactions between family members.