Which of the Following Statements About Fraud Is Not True

question 43

Multiple Choice

Which of the following statements about fraud is not true?

• A) Fraud is defined in generally accepted auditing standards as any act that results in a material misstatement in financial statements that are the subject of an audit.
• B) Auditors are concerned about two types of misstatements that are relevant to the auditor's consideration of fraud.
• C) The types of fraud that are the least frequent are also the most expensive.
• D) The fraud triangle includes opportunity, incentives, pressures, attitudes and rationalization.
• E) Auditors should conduct discussions about management overrides of internal controls with employees having varying levels of authority including personnel not directly involved in the financial reporting process

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Definitions:

Instincts

Innate, typically fixed patterns of behavior in animals and humans in response to certain stimuli.

Problems With Formal Organizations

Issues or challenges that arise within structured groups or entities, often related to bureaucracy, inefficiency, or conflict among members.

Dissatisfaction

Dissatisfaction is the feeling of displeasure or unhappiness resulting from unmet expectations or desires.

Psychological

Relates to the mental processes and emotional state of an individual or group.