Which of the Following Fraudulent Activities Most Likely Could Be

question 1030

Multiple Choice

Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal controls in the revenue cycle?

• A) Fictitious transactions may be recorded that cause an understatement of revenues and overstatement of receivables.
• B) Claims received from customers for goods returned may be intentionally recorded in other customers' accounts.
• C) Authorization of credit memos by personnel who receive cash may permit the misappropriation of cash.
• D) The failure to prepare shipping documents may cause an overstatement of inventory balances.

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Definitions:

Individual Values

Personal principles or standards of behavior; one's judgment of what is important in life.

Meaningful Work

Work that is viewed as having significance and purpose by the individual performing it.

Person-Role Conflict

A form of psychological stress occurring when an individual's personal values, beliefs, or behaviors clash with the expectations of their professional role.

Exterminating Company

A business specializing in the removal and control of pests, such as insects and rodents, from homes, businesses, and other properties.