A brief history of Accounting Regulation 3.1.2

Which of the following is a standard that defines how accountants record financial transactions?

• generally accepted accounting principles

• ​government applied accounting practices

• ​general accounting and auditing procedures

• government allowed accounting practices

What organization is responsible for maintaining GAAP?

• ​United States Congress

• ​Financial Accounting Standards Board

• Internal Revenue Service

• ​Sarbanes-Oxley Board

After the stock market crash, the government created the _____ to regulate businesses.

• ​Internal Revenue Service

• Business Administration Commission

• ​Securities and Exchange Commission

• Stock Market Oversight Board

Which of the following is a responsibility of the Securities and Exchange Commission?

• collecting taxes from businesses

• providing advice on how to run companies more effectively

• ​approving the salaries of CEOs in public companies

• ​enforcing accounting laws and regulations

Which of the following companies was involved in energy and other resource trading?

• ​Enron

• ​WorldCom

• ​Adelphia

• Arthur Andersen

How did Enron's management hide the company's debts and losses?

• ​by not following GAAP

• ​by transferring them to subsidiary companies

• ​by issuing company stock shares

• ​by declaring bankruptcy

What was the CEO of Tyco accused of doing?

• ​hiding debt by transferring it to subsidiaries

• ​hiding debt by transferring it to subsidiaries

• using company funds to pay for his lavish lifestyle

• ​engaging in insider trading

​Why was Arthur Andersen accused of obstructing justice when the SEC started to investigate Enron?

• ​Why was Arthur Andersen accused of obstructing justice when the SEC started to investigate Enron?

• ​They used poor practices to audit Enron's accounting records.

• ​They approved Enron's financial reports

• They shredded documents related to their auditing of Enron.

What organization was created by the Sarbanes-Oxley Act?

• Public Company Accounting Oversight Board

• ​Securities and Exchange Commission

• the auditing review board

• ​Financial Accounting Standards Board

According to most large company CFOs, SOX has _____.

• ​increased fraud

• ​increased investor confidence

• ​decreased company profits

• decreased stock prices