- 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 are related to opportunities?
II. There are aggressive or unrealistic profitability expectations.
III. Management is dominated by a small group without compensation controls.
IV. There are high turnover rates of accounting and information technology personnel.
V. There is ineffective management monitoring as a result of ineffective oversight by the audit committee.
I. The nature of a firm's operations involves significant related-party transactions. These parties are audited by another firm.
II. There are aggressive or unrealistic profitability expectations.
III. Management is dominated by a small group without compensation controls.
IV. There are high turnover rates of accounting and information technology personnel.
V. There is ineffective management monitoring as a result of ineffective oversight by the audit committee.
Correct Answer: I, III, IV and V
II is related to pressures.
User Contributed Comments 4
| User | Comment |
|---|---|
| jmcarr02 | IV isn't a factor, it is a sign ! |
| AusPhD | no jmcarr02, high turnover of these personnel make it easier for others to manipulate the system. |
| judylyh | why is I correct? |
| johntan1979 | Read the notes |