Which of the following is a problem resulting from the emphasis on earnings?

Managers may ignore sales forecast

Internal controls may deteriorate

Quality of earnings may suffer

Responsibility of Lower level managers may increase

2. A public traded firm must have

A functioning board of directors

A CFO with significant accounting experience

A specific time each week to meet with employees regarding potential fraud

An ethics committee

3. The audit committee is

A part of the internal audit function

A subset of directors who Must be independent.

No longer part of corporate governance

Chaired by a CPA

4. Who is responsible for selecting, hiring and compensating the external auditors?

CEO

CFO

Audit committee of the BOD

All of the above

5. High quality earnings are those that

Fluctuate widely between periods

Provide accurate and reliable information about the firms earnings.

Exceed $1 per share

Are found in the shareholders equity section of the balance sheet.