Select one: When the person managing the business for an owner, acts in accordance with the owner's interests When the person managing the business and the person who owns the business are not aligned on the activities of the business When the person managing the business for an owner, acts in a manner that improves the financial well

Select one: When the person managing the business for an owner, acts in accordance with the owner's interests When the person managing the business and the person who owns the business are not aligned on the activities of the business When the person managing the business for an owner, acts in a manner that improves the financial well

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 3CYBK: Which of the following are affected by the quality of an organization’s internal controls? a....

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nternal control does not consist of policies and procedures that Select one: a. Ensure that business information is accurate b. Protect assets from misuse c. Guarantee the company will earn a profit d. Ensure employees and managers comply with laws and regulations
Based on your understanding, why do agency relationship exist within businesses particularly for corporation? What is conflict of interest and how is this related to agency relationship within business firms?
Discuss the dangers of ignoring the impact of business decisions on the full range of stakeholders, as applied in your business situation.
1.What are the impact of issues in management accounting practices on the company and stakeholder? 2. Elaborate some suggestions to avoid the recurrence of the issues in management accounting practices.
20)Which of the following is the best definition of an internal user of accounting information? A) Creditors, such as banks, that use accounting information to evaluate the risk of lending money B) Investors who use accounting information to decide whether to buy or sell stock C) Managers who use accounting information to plan, organize, and run a business D) Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits
Business is a sub- system of Society‟. Which of the following option supports this claim? Choose correct answer a. Corporate Social Responsibility. b. Corporate Governance. c. Governing Principles. d. Ethics.
Why do you think ethics is so important in accounting and business in general?
A According to shankman(1999), two features make agency relations special. One of this is inherent conflict of interest between shareholders and managers. What is the other? a- limited communication between owners and managers b- large difference in defined rights and obligations c- informational asymmetry between principal and agents d- short term focus of the ownership goals
A concept of accounting that indicates that the financial records of the business should be kept separate from the personal financial records of the business owner is the ________________________. Group of answer choices business entity concept cost concept proprietorship concept asset concept
6. Which of the following Threats to The Fundamental Principles of professional ethics, that may occur as a result of the financial interests of a professional accountant in a client company. a. Advocacy threat b. Self-interest threat c. Self review threat d. Intimidation threat
Within the context of financial management, it is important that organizations attempt to align their managers' interests with that of the shareholders. In Chapter 16, Berk and DeMarzo (2020) provide several examples of agency conflict or a conflict between the owners and the management of a firm. Examples of these are: (a) at times managers will take on less (greater) risk than they would if they were the owners of the firm and (b) due to the separation of ownership and control managers are able to entrench themselves within firms and have little risk of being replaced. Provide a few examples of mechanisms that organizations could use to align the interests of both the owners of the firm and its managers.