The Concept of "Qui Tam

question 19

Multiple Choice

The concept of "qui tam":

• A) Was first established in the United States by the False Claims Act and has been mimicked by various state laws
• B) Was first established in the United States by the False Claims Act, but gained widespread application when it was enacted as a core element of the Sarbanes-Oxley Act
• C) Is an effective deterrent in Europe against accounting fraud and, according to critics, should be adopted in the United States
• D) Enables the SEC to recover an equal share of all investor recoveries obtained in private investor lawsuits

Recognize the significance of revenue recognition and its potential for fraud.

Understand the principles behind the time period assumption.

Develop the ability to correct financial statements based on omitted adjusting entries.

Realize the importance of adjusting entries in representing true financial position and performance.

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Definitions:

Comparative Advantage

A principle that states a country should produce goods and services at a lower opportunity cost than its trade partners.

Monetary Cost

The total amount of money that is spent in order to purchase goods or services.

Resources

Inputs or assets used in the production of goods and services, including labor, capital, and natural materials.

Absolute Advantage

The advantage in the production of a good enjoyed by one country over another when it uses fewer resources to produce that good than the other country does.