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A researcher is studying the incidence of earnings restatements over the period between 1995 and 2010. The total number of observations showed 5,437 incidents of
A researcher is studying the incidence of earnings restatements over the period between 1995 and 2010. The total number of observations showed 5,437 incidents of restated earnings. The restatements were classified according to the source of the error summarized in the following table.
Source | Observed |
---|---|
Revenue recognition | 3,250 |
Operating expenses | 1,685 |
Pension accounting | 289 |
Other | 213 |
Based solely on the information provided, the empirical probability that a future earnings restatement is not related to revenue recognition is closest to:
Group of answer choices
40%.
50%.
60%.
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