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B manipulations to accounts payable to increase the

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B)Manipulations to accounts payable to increase the reported amount of cash flow from operations (suchas by delaying payments to creditors) can be detected by examining the composition of the operationssection of the cash flow statement.Question 73XTM Industries is an Indian company that issues financial reports in accordance with Indian GAAP.For many years, depository receipts based on XTM's shares have traded on exchanges in the UnitedStates. Which of the following statements ismostaccurate? The US Securities and ExchangeCommission:A) requires XTM to issue a full set of US GAAP-compliant financial reports.Carrying amount$45 millionTax base$40 millionScenario1($45,000,000 - $40,000,000) x 25% =$1,250,000Scenario2($45,000,000 - $40,000,000) x 30% =$1,500,00060
B) only requires XTM to reconcile its net income and shareholders' equity accounts to US GAAP.C) no longer requires XTM to reconcile any accounts from its financial statements with US GAAP.B)Non-US companies with shares (or depository receipts based on their shares) that trade on USexchanges are required by the US SEC to reconcile their net income and shareholders' equity accountswith US GAAP. In 2007, this requirement was eliminated for firms that adhere to IFRS, but continuesto be enforced for firms that adhere to other sets of accounting standards.Question 74When assessing a company's credit risk, an analyst ismost likelyto focus which of the following?A) Working capitalB) Income statementC) Statement of cash flowsC)Lenders are primarily concerned about a company's ability to repay its debt. The obligations must besatisfied with cash rather than accrual income. Credit analysts are most likely to be interested in acompany's ability to generate operating cash flows.Question 75From a due diligence perspective, diversifying a portfolio's allocation to alternative investments acrossmultiple managersmost likely:A) produces a more diversified portfolio.B) creates a better alignment of interests.C) provides greater protection against possible fraud.C)Entrusting assets to just one manager increases an investor's exposure to potential fraud. Despite beingrelatively rare, fraudulent managers can cause significant harm to an investor's financial health.Diversification of managers does not necessarily produce a more diversified portfolio. Allocating 1% ofa portfolio to five different energy mutual funds is unlikely to result in significantly morediversification benefits than allocating 5% of assets to a commodity ETF.Similarly, investing with five managers will not do anything to more closely align the interests of thesemanagers with those of the investor.Question 76When comparing a company that uses the last-in-first-out (LIFO) method to a peer that uses FIFO, ananalyst isleast likelyto make adjustments to which of the following?

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