Problem $1$:

$1.$ Match the following organizations to their descriptions.

$*\_\_\_\_$ FASB

$*\_\_\_\_$ PCAOB

$*\_\_\_\_$ SEC

$*\_\_\_\_$ EITF

$*\_\_\_\_$ ASB

$1.$ Sets auditing standards for auditors of publicly traded companies

$2.$ Sets U$.$S$.$ generally accepted accounting principles

$3.$ Helps apply U$.$S$.$ generally accepted accounting principles to new situations

$4.$ Sets auditing standards for auditors of private companies

$5.$ Created by the Securities Exchange Act of $1934$ to protect investors

Problem $2$:

a$.$ The officers of a public company owe a fiduciary duty, a duty of trust and confidence, to the company$$s shareholders. What was the fiduciary duty of Tesco? How did Tesco officers breach that duty? Why do you think Tesco did this? Explain.

b$.$ Do you think the officers were actually trying to fulfill their fiduciary duty to act in the shareholders$$ best interests, but doing so in a wrongful $($and ultimately self$-$defeating$)$ way? Why or why not?

c$.$ If the accounting irregularities had been an honest mistake, do you think Tesco would still be liable for breaking their fiduciary duty? Why or why not?

d$.$ As the shareholder of a public company, would you want your company$$s officers to fudge the numbers in order to avoid damage to the company$$s share price?

e$.$ If you were one of the accountants who faced pressure by managers to $$pull forward$$ future income, what would you have done and why?