In Comparing Management Fraud with Employee Fraud, the Auditor's Responsibility

question 86

Multiple Choice

In comparing management fraud with employee fraud, the auditor's responsibility to discover the fraud is:

• A) greater for employee fraud because of the larger number of employees in the organisation.
• B) the same for both management and employee fraud.
• C) greater for management fraud because of management's ability to override existing internal controls.
• D) greater for management fraud because managers are inherently smarter than employees.

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Definitions:

PE Ratio

Price-to-Earnings Ratio is a measure that compares a company's current share price to its per-share earnings.

Stock Price

The cost of purchasing one share of a company's stock.

Investment Activity

Transactions involving the purchase and sale of long-term assets and other investments not generally considered cash equivalents or traded in active markets.