Which of the Following Is Not One of the Components

question 80

Multiple Choice

Which of the following is not one of the components of the fraud risk model?

• A)Incentive.
• B)Rationalization.
• C)Susceptibility.
• D)Auditors do not use a fraud risk model.

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Definitions:

Economic Profit

The profit from undertaking an activity after subtracting both the explicit and implicit costs associated with that activity.

Implicit Costs

Expenses that do not involve a direct monetary payment but represent the opportunity cost of using resources owned by the company or individual.

Average Cost of Production

The total cost of production divided by the quantity of output produced, indicating the cost to produce each unit of output.

Total Profit

The net profit a company earns, calculated by deducting all costs from its total income.