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Basic Question 3 of 11
Which of the following factors is (are) not related to incentives/pressures?
II. Stock exchange listing requirements
III. Personal guarantees of a firm's debts
IV. Deficient internal controls resulting from ineffective accounting and information systems
V. Excessive third party pressures on management to meet debt repayment
I. Rapid growth or unusual profitability
II. Stock exchange listing requirements
III. Personal guarantees of a firm's debts
IV. Deficient internal controls resulting from ineffective accounting and information systems
V. Excessive third party pressures on management to meet debt repayment
User Contributed Comments 4
| User | Comment |
|---|---|
| bundy | iv is opportunity |
| ninad123 | II is also a pressure (third party). Here third party is the stock exchange |
| GouldenOne | How is 5 related to opportunities? They are being pressured. It even says pressures management. The third party doesn't have control over them. There is no hint of lack of internal control |
| Boydbri1 | GouldenOne, IV means 4 |
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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® 2024 Level I Curriculum, Volume 3, Module 10.