Question

The timing gaming problem occurs when the incentives for the worker are non-linear. True or False?

A concave reward structure when the commission rate declines as output increases, results in a smoothing of output throughout the time period. True or False?

The timing gaming problem is evidence that non-linear reward structures should never be used. True or False?

Answer 1

6-1)
a) As per the annual report of the target corporation there are independent auditors for the target.internal control possessed over the financial reports on the 3rd February 2018 was audited by Errist and young LLP.which was the independent as well as the registered form of public accounting who also audited the consolidated financial statements of the firm.
b) The level of assurance provided by and independent auditor is the reasonable assurance. Also present a high level but not a total absolute level of the assurance.the independent audit also leads to enhancement of the confidence by the process of supplementing the rules which the principal player play as well as have varying responsibilities for all the financial statements. An independent auditor his supposed to avoid the conflict of the interest and also ensures the integrity of audit performance. The independent auditors are mandated for protection of the shareholders and the potential investors from fraudulent financial claims which are made by the public companies.
6-1A)
a) Section 404 of the Sarbanes oxley act needs the annual reports of the public companies for including the companies assessment for internal control over the financial reporting along with a attestation by the auditor.after the enactment of the law both these requirements are was found for the small public companies. Even though the framework of COSO was not created specifically for the sarbanes oxley act. The guidelines formulated for the COSO Framework would satisfy the requirements of SOX. As a consequence COSO is used by many auditors for auditing the compliance of SOX.
b) principally the sarbanes oxley act applies to the companies dealing with public trading.the content of the act provided guidelines which are useful for healthy corporate practices which are applied equally to the private companies also affecting the private companies for maintaining an ESOP.