Page 36 - CFA Lecture Day 10 Slides
P. 36

Session Unit 9:
                                                                              32. Financial Reporting Quality, p.305








            LOS 32.e: Describe conditions that are conducive to issuing low-quality, or even

            fraudulent, financial reports, p.309




          •   The company has weak internal controls.
                                                         tanties
          •   The board of directors provides inadequate oversight.
          •   Applicable accounting standards provide a large range of acceptable accounting

              treatments, provide for inconsequential penalties in the case of accounting fraud, or both.
          •   Rationalisation – ‘I have to’, I’ll reverse it next period’!
   31   32   33   34   35   36   37   38   39   40   41