CFA Practice Question

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CFA Practice Question

Which of the following factors is (are) not related to incentives/pressures?

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
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