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Basic Question 4 of 11
Which of the following factors are related to opportunities?
II. There are aggressive or unrealistic profitability expectations.
III. Management is dominated by a small group without compensation controls.
IV. There are high turnover rates of accounting and information technology personnel.
V. There is ineffective management monitoring as a result of ineffective oversight by the audit committee.
I. The nature of a firm's operations involves significant related-party transactions. These parties are audited by another firm.
II. There are aggressive or unrealistic profitability expectations.
III. Management is dominated by a small group without compensation controls.
IV. There are high turnover rates of accounting and information technology personnel.
V. There is ineffective management monitoring as a result of ineffective oversight by the audit committee.
User Contributed Comments 4
| User | Comment |
|---|---|
| jmcarr02 | IV isn't a factor, it is a sign ! |
| AusPhD | no jmcarr02, high turnover of these personnel make it easier for others to manipulate the system. |
| judylyh | why is I correct? |
| johntan1979 | Read the notes |
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Learning Outcome Statements
describe motivations that might cause management to issue financial reports that are not high quality and conditions that are conducive to issuing low-quality, or even fraudulent, financial reports
describe mechanisms that discipline financial reporting quality and the potential limitations of those mechanisms
CFA® 2025 Level I Curriculum, Volume 3, Module 10.