Question 1. Identify various financial statement users and discuss how the decisions these users make based on the financial statements might affect their wealth?
Question 2. Since management prepares the company's financial statement, they may engage in certain brhaviours to alter the appearance of the statements and, possibly, mislead financial statement users. Sometimes these attempts to alter the appearance of the financial statements violate GAAP, as well as acceptable legal and ethical boundaries. Identify what the violation was, why management would engage in violation, and how such violation might harm various financial statements users.
Question 3. Discuss possible solutions that might reduce management's incentive(s) to engage in behaviours that violate GAAP and cross over acceptable legal and ethical practices.