An Operating Condition That Can Contribute to a Higher Risk

question 16

Multiple Choice

An operating condition that can contribute to a higher risk of fraud is:

• A) management by crisis.
• B) high company loyalty.
• C) flexible rules.
• D) proper authorization.

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Definitions:

Common Stock

represents units of ownership in a corporation, giving shareholders voting rights and a share in the company’s profits through dividends.

Market Value

The current quoted price at which an asset or service can be bought or sold in a marketplace.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders.

Stock Option Plan

A compensation strategy used by companies to grant employees the right to purchase company shares at a predetermined price after a specified period.