Fraud Risk Factors Are Examples of Factors That Increase the Risk

question 31

Multiple Choice

Fraud risk factors are examples of factors that increase the risk of fraud.Which of the following is an example of a management "opportunities" risk factor?

• A)The company has lost a major account and income is falling.
• B)Two major competitors have gone bankrupt as margins decline in the industry.
• C)The Chief Executive Officer owns forty percent of the outstanding share capital.
• D)New accounting standards provide three different methods for valuing financial instruments.

---

Definitions:

Liquidation Expenses

Costs associated with winding up a business's operations, including paying off debts, selling assets, and distributing the remaining assets to shareholders.

Account Balances

The amounts remaining in financial accounts at a specific point in time, reflecting the difference between debits and credits.

Maximum Amount

The highest possible value or quantity that can be achieved or allowed in a particular context.

Journal Entry

A record in the books of accounts that captures the financial transactions of a business in chronological order.