1. In what case would granting of stock options would not be remuneration for services?
2. Most of us think of more elaborate footnotes when it comes to asking for more transparent information. However, oftentimes it is not as simple as that. Here’s an
example: Accrued Expense and Accounts Payable amounts are combined on one line item in the Balance Sheet. Why might this be a problem for you as an investor? What about as an analyst? Would you like the amounts broken down into two categories or are you content
with a condensed version? Why?
3. Let’s argue the point of information overload that often follows increased financial statement transparency. For instance, at Enron, the details of its SPE arrangements were all disclosed and made available for public review
in a document exceeding 300 pages in length! Is it reasonable to expect the ‘average user’ of financial statement to have the necessary expertise and time to adequately review this information? Why or why not? Briefly answer all questions with explanation.