Chapter 11 Flashcards
1
Q
earnings management
A
involves actions to meet earnings objectives
2
Q
income smoothing
A
when expenses and revenues are shifted between periods to smooth earnings
3
Q
fraud triangle
A
incentives/pressures
opportunities
attitudes/rationalization
4
Q
professional skepticism
A
neither assumes management is dishonest nor assumes unquestioned honesty
5
Q
horizontal analysis
A
account balances are compared with last years
6
Q
vertical analysis
A
financial statement numbers are converted to percentages
7
Q
tone at the top
A
management and the board are responsible for setting this
8
Q
audit committee
A
primary responsibility to oversee the organization’s financial reporting and internal control processes
