- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 10. Financial Reporting Quality
- Subject 3. Context for Assessing Financial Reporting Quality
CFA Practice Question
Which of the following factors is (are) not related to incentives/pressures?
II. Stock exchange listing requirements
III. Personal guarantees of a firm's debts
IV. Deficient internal controls resulting from ineffective accounting and information systems
V. Excessive third party pressures on management to meet debt repayment
I. Rapid growth or unusual profitability
II. Stock exchange listing requirements
III. Personal guarantees of a firm's debts
IV. Deficient internal controls resulting from ineffective accounting and information systems
V. Excessive third party pressures on management to meet debt repayment
Correct Answer: IV only
This factor is related to opportunities.
User Contributed Comments 4
| User | Comment |
|---|---|
| bundy | iv is opportunity |
| ninad123 | II is also a pressure (third party). Here third party is the stock exchange |
| GouldenOne | How is 5 related to opportunities? They are being pressured. It even says pressures management. The third party doesn't have control over them. There is no hint of lack of internal control |
| Boydbri1 | GouldenOne, IV means 4 |