To better monitor the performance of operating management, executive management has requested that the internal auditors examine interim financial statements, which are prepared for internal use only. although interim financial statements have been prepared for several years, this will be the first time that the internal auditors have been involved. the primary reason for this request was that executive management was surprised at the lower-than-anticipated net income eventually reflected in last year? s audited financial statements. earnings had been artificially manipulated on quarterly financial statements. in their work on this year? s interim financial statements, internal auditors are likely to focus on which of the following?
whether there have been changes in accounting principles that materially affect the financial statements.
whether payables have been accrued properly at the end of the interim period.
whether accounting estimates are reasonable, given past actual results.
the timing of revenue recognition and the valuation of inventories.

In year 1, the bennetts' 25-year-old daughter, jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends. in previous years, jane has never worked and her parents have always been able to claim her as a dependent. in year 1, a kind neighbor offers to pay for all of jane's educational and living expenses. which of the following statements is most accurate regarding whether jane's parents would be allowed to claim an exemption for jane in year 1 assuming the neighbor pays for all of jane's support? a.no, jane must include her neighbor's gift as income and thus fails the gross income test for a qualifying relative.b.yes, because she is a full-time student and does not provide more than half of her own support, jane is considered her parent's qualifying child.c.no, jane is too old to be considered a qualifying child and fails the support test of a qualifying relative.d.yes, because she is a student, her absence is considered as "temporary." consequently she meets the residence test and is a considered a qualifying child of the bennetts.

Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for the project are three and a half and four and a half years, respectively. use the irr decision to evaluate this project; should it be accepted or rejected

The goal of an economist who formulates new theories is to a. provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. b. provoke stimulating debate in scientific journals. c. contribute to an understanding of how the world works. d. demonstrate that economists, like other scientists, can formulate testable theories.