Management’s attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity’s control environment when:. i. External policies established by parties outside the entity affect its accounting practices.
ii. Management is dominated by one individual who is also a shareholder.
iii. Internal auditors have direct access to the board of directors and the entity’s management.
The audit committee is active in overseeing the entity’s financial reporting policies.

Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard deviation of 25%. stocks a and b have returns that are independent of one another; i.e., their correlation coefficient, r, equals zero. stocks a and c have returns that are negatively correlated with one another; i.e., r is less than 0. portfolio ab is a portfolio with half of its money invested in stock a and half in stock b. portfolio ac is a portfolio with half of its money invested in stock a and half invested in stock c. which of the following statements is correct? a. portfolio ab has a standard deviation that is greater than 25%.b. portfolio ac has an expected return that is less than 10%.c. portfolio ac has a standard deviation that is less than 25%.d. portfolio ab has a standard deviation that is equal to 25%.e. portfolio ac has an expected return that is greater than 25%.