Backdating options refers to:
A) Crossing out the date of exercise on the option certificate and changing it to an earlier date when the stock price was lower
B) Changing the grant date of the options to lower the exercise price and reduce reported earnings
C) Granting options to employees working for the company in years prior to the granting of the options
D) Changing the future exercise price to correspond market increases in the stock price

Question

Quizplus · Accepted Answer

Backdating options involves changing the grant date of options to a date when the stock price was lower, resulting in a lower exercise price and reducing reported earnings. This can be used as a way to manipulate financial statements and benefit executives. Choices A, C, and D do not accurately describe backdating options.

Backdating Options Refers To