A Key Control Environment Factor in Reducing the Risk of Fraudulent

question 27

Multiple Choice

A key control environment factor in reducing the risk of fraudulent financial reporting through the overstatement of sales and accounts receivable is:

• A) management's adoption and adherence to high standards of integrity and ethical values.
• B) reducing the emphasis on sales targets.
• C) establishing an effective audit committee.
• D) all of the above.

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Definitions:

Productivity

The efficiency at which production inputs, such as labor and capital, are turned into outputs, often measured as the ratio of output to input over a specific period.

Intervention

An action or process of intervening, often implemented to bring about a change or influence the outcome in a positive way.

Chi-Square Test Statistic

A value calculated during a Chi-Square Test that measures the difference between observed and expected frequencies, used to assess the evidence against a null hypothesis.

One-Sample Test

A statistical test used to determine if the mean of a single sample differs significantly from a known or hypothesized population mean.