Identify the True Statement About Detecting Fraud Using Financial Statement

question 29

Multiple Choice

Identify the true statement about detecting fraud using financial statement reports.

• A) Performing horizontal analysis requires converting the income statement balances into percentages of gross sales.
• B) Vertical analysis is the most direct method of focusing on changes from period to period.
• C) Before performing any data-driven analysis that targets fraud and corruption in financial statements, the numbers in all three types of financial statements need to be converted to percentages.
• D) Small frauds may not affect the summarized financial statements significantly enough to be detected.

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Definitions:

Island Arcs

Curved chains of volcanic islands located along convergent tectonic plate boundaries, typically with deep ocean trenches on the convex side.

Abyssal Plains

Very flat, deep-sea floors found at depths between 3,000 and 6,000 meters, making up a large portion of the ocean's basin.

Oceanic Fracture Zones

Linear oceanographic features caused by the movement of tectonic plates, characterized by significant variations in depth and topography.

Seafloor

The bottom of an ocean or sea, composed of various geological features including ridges, valleys, plains, and trenches, shaped by processes like volcanic activity, sediment deposition, and tectonic movements.