16.Which of the following statements is incorrect?

Select one:

a. All of the above are correct statements

b. Financial restatements occur when a material error is discovered in the company's previous financial statements

c. A restatement can only be caused by human error

d. The most frequent case of a financial restatement is improper expense recognition

17.According to the text, which is not one of the three primary purposes of a CEO compensation plan?

Select one:

a. Motivate them to perform appropriately

b. Reward them for a job well done

c. Attract the right people

d. Retain the right people

18.Which of the following is an investors with a significant ownership position in a common stock?

Select one:

a. Passive investor

b. Block-holder

c. Free-rider

d. Active investor

19.Which of the following about executive equity is not right?

Select one:

a. Equity ownership always provides incentives that motivate managers to improve corporate governance

b. Hedging and pledging both make executives achieve diversification

c. The SEC adopted rule 10b5-1 to protect insiders whose position regularly exposes them to important nonpublic information

d. Most companies permit executives to trade using 10b5-1 plans

20.Which of the following is not a factor for determining credibility on the usefulness of ratings?

Select one:

a. Ratings provider must be free from conflicts of interest that would comprise the judgement of the provider

b. Ratings provider must be able to demonstrate the predictive ability of ratings

c. Ratings must be objective i.e. based on data that an outside observer would similarly evaluate

d. Ratings must only be related to future outcomes that are of interest to the users