Final answer:
Management bias refers to the lack of neutrality in how management prepares and presents information, which can result in a one-sided portrayal that misleads stakeholders. Option a is the correct asnwer.
Step-by-step explanation:
Management bias is defined as a lack of neutrality by management in the preparation and fair presentation of information. This means that management may have a preconceived opinion that affects how information is presented, leading to a skewed portrayal that may mislead stakeholders or decision makers. For instance, they might only highlight positive outcomes while downplaying negatives, or choose to omit certain facts that contradan their objectives.
This can manifest in various forms, such as the selective hiring for key positions based on personal preferences rather than on objective criteria, or searching for auditors who are willing to provide a desired opinion on financial statements—known as 'opinion shopping'. To combat management bias, it is essential to establish checks and balances and to be aware of the potential for biases in reporting and documentation, whether from conscious intention or unintentional prejudice.