c选项

问题如下：

Question Which of the following conditions would most likely create opportunities for a company to issue low-quality financial reports?

选项：

A.A company with an audit committee comprised only of independent board members B.Government cutbacks in the enforcement branch of the financial regulator C.Accounting standards that provide few choices

解释：

Solution

1. Incorrect. An independent audit committee reduces the opportunity to produce low-quality financial reports.

2. Correct. Cutbacks in the enforcement branch of the financial regulator could lead to less effective enforcement and oversight of financial issuers, thus creating an opportunity for low-quality financial reporting.

3. Incorrect. Accounting standards that do not allow a range of choices reduce the opportunity for low-quality financial reporting.

Financial Reporting Quality

• describe motivations that might cause management to issue financial reports that are not high quality and conditions that are conducive to issuing low-quality, or even fraudulent, financial reports