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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 |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
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.