Can You Pass This Difficult Trivia Questions?

The Sarbanes-Oxley Act (SOX) was enacted in response to major corporate and accounting scandals, such as Enron and WorldCom. Its primary purpose is to enhance corporate governance and accountability by implementing stricter regulations on financial reporting, auditing, and internal controls. SOX aims to increase transparency and protect investors by ensuring that companies maintain accurate financial records and have robust internal control mechanisms.

Retained earnings are reported in the Statement of Shareholders' Equity, which shows changes in equity over a period. This statement includes retained earnings, additional paid-in capital, and other equity components. Retained earnings reflect the cumulative amount of net income that a company has reinvested in the business rather than distributed as dividends.

Ethical relativism suggests that moral principles are context-dependent and can vary based on culture, society, or individual circumstances. In contrast, ethical absolutism asserts that there are universal moral principles that apply to all individuals, regardless of context. The main difference lies in whether ethics are seen as flexible and situational (relativism) or fixed and universal (absolutism).

Eugene Fama is renowned for developing the Efficient Market Hypothesis (EMH), which proposes that financial markets are "informationally efficient." According to this theory, asset prices reflect all available information at any given time, making it impossible for investors to consistently achieve returns that exceed average market returns through stock picking or market timing.

Fiduciary duty is a legal and ethical obligation that requires individuals or entities, such as financial advisors or company directors, to act in the best interest of their clients or stakeholders. This duty involves prioritizing the interests of clients above personal or business gains, ensuring that decisions are made with integrity, honesty, and transparency.

Basel III is an international regulatory framework designed to strengthen the regulation, supervision, and risk management of the banking sector. Its main goal is to enhance capital adequacy by increasing the minimum capital requirements for banks, improving the quality of capital, and introducing new liquidity and leverage ratios to ensure banks can withstand financial stress.

Corporate Social Responsibility (CSR) is based on the principle that businesses have a responsibility beyond profit-making to contribute positively to society. This includes addressing social, environmental, and economic impacts, and ensuring that their operations benefit the community. CSR involves ethical practices, sustainability efforts, and engagement in community welfare.

Accrual Basis Accounting recognizes revenue and expenses when they are incurred, not necessarily when cash transactions occur. This method provides a more accurate picture of a company's financial performance by matching revenues with the expenses incurred to generate them, thus reflecting the true economic activity within a period.

Beta is a measure of a stock's volatility or risk relative to the overall market. A beta of 1 indicates that the stock's price moves in line with the market. A beta greater than 1 means the stock is more volatile than the market, while a beta less than 1 means it is less volatile. Beta helps investors understand the risk associated with a stock compared to market movements.

Insider trading involves buying or selling securities based on non-public, material information. The main ethical concern is that it gives an unfair advantage to those with access to confidential information, undermining the integrity of financial markets. It can harm other investors who do not have access to such information and erode public trust in the fairness of the securities markets.