James Doty, the Chairman of the PCAOB, in His Testimony

question 43

Multiple Choice

James Doty, the chairman of the PCAOB, in his testimony before Congress on the financial crisis of 2007-2008, admitted that auditors should have been more vigilant-not just at Lehman Brothers, but across the board. Which audit areas did Doty signal out for criticism?

• A) Inventories and cash flow
• B) Capital and operating expenses
• C) Special purpose and related-party entities
• D) Valuations and end-of-period transactions

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Definitions:

Vestibular Sense

Refers to the body's sensory system that contributes to balance and spatial orientation.

Kinesthetic Sense

The sense that detects body position, movement, and the sense of muscle tension, aiding in physical coordination.

Body's Position

Refers to the orientation or posture of the human body, including how it's held or arranged in space, affecting balance, coordination, and functionality.

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50% of the time.