Which of the Following Factors Is the Most Significant Contributor

question 18

Multiple Choice

Which of the following factors is the most significant contributor to fraud risk?

• A) poor hiring practices
• B) collusion between employees and third parties
• C) the industry in which the entity operates
• D) overriding of internal controls

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Definitions:

Market Interest Rates

The prevailing rate of interest available in the marketplace on investments and borrowing.

Exercise Price

The price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying asset.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield on government bonds.

Option

A contract that gives its owner the right to buy or sell some asset at a fixed price on or before a given date.