In Comparing Management Fraud with Employee Fraud,the Auditor's Risk of Failing

question 49

Multiple Choice

In comparing management fraud with employee fraud,the auditor's risk of failing to discover the fraud is greater for

• A)employee fraud because of the larger number of employees in the organization.
• B)employee fraud because of the irregular hours worked by some employees.
• C)management fraud because of management's ability to override existing internal controls.
• D)management fraud because managers are inherently smarter than employees.

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Definitions:

Cognitive Dissonance

A mental struggle caused by holding conflicting beliefs and attitudes at the same time.

Leon Festinger

A social psychologist known for developing the theory of cognitive dissonance.

Theory

An organized collection of thoughts aimed at clarifying something, established on broad principles that are not derived from the phenomenon being clarified.

Fear Arousal

The process of inducing a state of fear in an individual, often used in psychological experiments or therapies.