Asset Frauds Are Often Easier to Detect Than Other Types

question 46

Multiple Choice

Asset frauds are often easier to detect than other types of financial statement fraud because:

• A) overstated assets are always included on the balance sheet.
• B) of the off-book nature of asset frauds.
• C) asset overstatements are almost always quite significant.
• D) sufficient information will be provided in the notes to financial statements.

---

Definitions:

Inventory Turnover Ratio

A financial metric that shows how many times a company has sold and replaced its inventory over a specific period, indicating the efficiency in managing stock.

Income Statement

A financial statement that shows a company's revenue, expenses, and profit over a specific period.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Cash Flow

The total amount of money being transferred into and out of a business, often used to assess financial health.