Answered: Which of the following factors creates…

Business

Accounting

Which of the following factors creates an opportunity for fraud to be committed in an organization?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Fraud

Fraud in accounting is the planned manipulation of financial documents to make a false appearance of corporate financial health. Moreover, it includes an employee, accountant, or the company itself misleading investors and shareholders.

Question

Which of the following factors creates an opportunity for fraud to be committed in an organization?

a. Management demands financial success.

b. Poor internal control.

c. Commitments tied to debt covenants.

d. Management is aggressive in its application of accounting rules.

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