Financial Accounting
5th Edition
ISBN: 9781618531650
Author: Thomas Dyckman
Publisher: Cambridge Business Publishers
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Chapter 1, Problem 13Q
To determine
Explain the reason why companies have traditionally opposed the effort of regulatory authorities to disclose more disclosure.
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How could the presentation of financial information pose an ethical dilemma to a business professional who is attempting to meet the demands of users who are interested in similar information?
Why does financial accounting have a positive impact on our society? a. It entails a detailed transaction record necessary for filing taxes with the Internal Revenue Service (IRS).b. It allows investors and creditors to redirect their resources to successful companies and away from unsuccessful companies.c. It prevents competitors from being able to steal the company’s customers.d. It provides a system of useful internal reports for management decision making.
What has been the main thrust of recent changes in the financial reporting rules following the financial scandals of Enron, Worldcom,
etc.?
Multiple Choice
To improve internal control over companies' financial reporting.
To add to the work of the companies' external accountants.
To force the companies to disclose more of their internal information.
To provide incentives to increase their net income.
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Chapter 1 Solutions
Financial Accounting
Ch. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5Q
Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10QCh. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - Prob. 19MECh. 1 - Prob. 20MECh. 1 - Prob. 21MECh. 1 - Prob. 22MECh. 1 - Prob. 24MECh. 1 - Prob. 25MECh. 1 - Prob. 26MECh. 1 - Prob. 27ECh. 1 - Prob. 28ECh. 1 - Prob. 29ECh. 1 - Prob. 30ECh. 1 - Prob. 31ECh. 1 - Prob. 32ECh. 1 - Prob. 33ECh. 1 - Prob. 34ECh. 1 - Prob. 35ECh. 1 - Prob. 36PCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Prob. 39PCh. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - Prob. 44PCh. 1 - Prob. 45PCh. 1 - Prob. 46CPCh. 1 - Prob. 47CPCh. 1 - Prob. 48CPCh. 1 - Prob. 49CPCh. 1 - Prob. 50CP
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- Reported accounting earnings provide valuable information to investors, lenders and regulators. Reported income is also important for executive bonus. Yet, within the structure of GAAP, managers can use judgment in computing accounting earnings and in structuring transactions. In other words, managers can engage in earnings management. What activities need judgment in preparing the accounting earnings? What safeguards can you suggest for reducing or preventing harmful earnings management intended to mislead investors and the market?arrow_forwardRisk in the widest sense is not new to business. All companies are exposed to traditional business risks: earnings go up and down as a result of such things as changes in the business environment, in the nature of competition, in production technologies, and in factors affecting suppliers. The issue of risk has captured considerable attention from corporate management in recent years, as financial risk management has become a critical corporate activity. Regulators have also responded with new legislation, regulations, and practices that seek to improve corporate governance standards. Required: ‘Risk management is not about elimination of risk’, Discuss.arrow_forwardWhich of the following places more pressure on ethics officers to monitor financial and sales reporting? A B с D E Sarbanes-Oxley Act Federal Sentencing Guidelines for Employees Ethics Officer Responsibility Act Sherman Antitrust Act Enron Financial Responsibility Actarrow_forward
- How does an accounting professional's commitment to the firm, the profession, and to colleagues influence whether he/she will blow the whistle on financial wrongdoing? What other factors, related to organizational culture, could contribute to whether or not a professional decides to blow the whistle on a financial wrongdoing?arrow_forwardIdentify any corporate governance issues that hinder smooth financial management that prevail in yourcountry. The presentation mainly highlights the following issues:a) What is it?b) Where it occurs?c) Detailed threats it poses to the business market or specific organization(s).d) Suggest solutions to what can be done.arrow_forwardSince risks, such as credit, liquidity, default, technological, and legal risks, among others, may affect the financial operations of the business or organizations. Laws are created to enfore financial regulations. In financial markets, these laws, rules and regulations control the following drivers: competitiveness, market behavior, consistency and stability. Market Behavior. Financial Regulation sets the parameters to ensure that firms will comply with the standards and level the playing field. The policies were set to regulate the information disclosure, advantage over intemal information, entry of new players, minimum capital requirement and minimum govemance requirements. QUESTION: Explain further what "market behavior" means. How do laws control market behavior in financial markets? Explain. Then identify the risks that arise from it.arrow_forward
- The study of corporate governance and the Code of Ethics for Professional Accountants is essential for accountants so that they can make appropriate accounting policy choices when presented with earnings management issues. refer a examples from recent corporate collapses to support your arguments.arrow_forwardCompanies have the moral obligation to conduct ethical operations. There are many cases where companies have different outcomes in their operations because of their interpretation of what ethics is. How can accounting ethics affect accounting operations and applications?arrow_forwardThe SEC is trying to get companies to notify the investment community more quickly when a "material change" will affect their forthcoming financial results. In what sense might a financial manager be seen as "more ethical" if he or she follows this directive and issues a press release indicating that sales will not be as high as previously anticipated?arrow_forward
- Corporate governance is concerned with: a) Minimizing the firm's costs. b) Maintaining the smooth operation of the firm. c) Aligning the goals of management with the goals of shareholders. d) Developing and marketing new products. e) Government regulation of corporations. 6.arrow_forwardAs a corporate financial manager, what steps could you take to protect your company from a liquidity crisis?arrow_forward(This is about Accounting Information System.) 1. Distinguish between ethical issues and legal issues. 2. When a company has a strong internal control structure, stockholders can expect the elimination of fraud. Comment on the soundness of this statement. 3. Distinguish between employee fraud and management fraud. 4. Discuss the Sarbanes-Oxley Act. Please provide me a correct answer. Thank you!arrow_forward
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