Question: Multiple Choice Questions 1 Which of the following is a problem

Multiple-Choice Questions
1. Which of the following is a problem resulting from the emphasis on earnings?
a. Managers may ignore sales forecasts.
b. Internal controls may deteriorate.
c. Quality of earnings may suffer.
d. Responsibilities of lower-level managers may increase.
2. A publicly-traded firm must have
a. A functioning board of directors.
b. A CFO with significant accounting experience.
c. A specific time each week to meet with employees regarding potential fraud.
d. An ethics committee.
3. The audit committee is
a. Part of the internal audit function.
b. A subset of directors who must be independent.
c. No longer part of corporate governance.
d. Chaired by a CPA.
4. Who is responsible for selecting, hiring, and compensating the external auditors?
a. CEO
b. CFO
c. Audit committee of the BOD
d. All of the above
5. High-quality earnings are those that
a. Fluctuate widely between periods.
b. Provide accurate and reliable information about a firm’s earnings.
c. Exceed $1 per share.
d. Are found in the shareholders’ equity section of the balance sheet.

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