Chapter 5 Recitation Review

All companies (publicly traded and privately held) are required to have their financial statements audited

• True

• False

Who is NOT a major player in the accounting communication process?

• Legislators

• Auditors

• Regulators

• Company Mangement

What US government agency is responsible for determining the rules for public companies' financial statements?

• Public Company Accounting Oversight Board (PCAOB)

• Securities and Exchange Commission (SEC)

• Financial Accounting Standards Board (FASB)

• International Financial Reporting Standards (IFRS)

Members of management who is MOST responsible for the company's financial statements

• Board of Directors

• Chief Strategy Officer

• Chief Financial Officer

• Accounting Department

The audit committee is responsible for hiring the company's independent auditors

• True

• False

Entity responsible for establishing GAAP

• International Accounting Standards Board (IASB)

• Securities and Exchange Commission (SEC)

• Public Company Accounting Oversight Board (PCAOB)

• Financial Accounting Standards Board (FASB)

Annual report that publicly traded companies must file with the SEC

• Form 10-Q

• Form 8-Q

• Form 4-K

• Form 10-K

An "unqualified" opinion indicates the auditors found substantial errors in a company's financial statement

• True

• False

Ratio that indicates how much the firm earned on every dollar invested in assets

• Gross Profit Percentage

• Return on Assets

• Earnings per Share

• Return on Equity

Which is NOT a component of the Fraud Triangle?

• Opportunity

• Rationalization

• Action

• Incentive