For all the questions below select the appropriate answer: a) Accounting informa

Question

For all the questions below select the appropriate answer: a) Accounting information can reduce the problem of moral hazard by: O Disciplining managers for poor performance O Forcing managers to work in the best interests of the company O Providing a way for shareholders to monitor management stewardship O Eliminating fraudulent transactions b) The Sarbanes-Oxley Act: O Has not resulted in improvements in disclosure practices O Was the cause of the 2008 financial crisis O Strengthened auditor independence rules O Eliminated the problem of information asymmetry c) Rules-based systems of accounting standards O Reduce comparability O Provide less detailed guidance O Provide more detailed guidance O Allow for more flexibility and judgment d) Two of the four enhancing qualitative characteristics of good accounting information are O Relevance, representational faithfulness Accuracy, timeliness O Comparability, understandability O Verifiability, relevance

Explanation / Answer

A.Providing a way for shareholders to monitor management stewardship

B. Strengthened auditor independence rules , Eliminated the problem of information asymmetry

C. Provide for more detailed guidance

D.timelines, Comparability, understandability , Verifiability

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