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

question 66

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 higher crime rate among blue collar workers.
• 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:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses and anxiety through gradual exposure to the feared stimulus while practicing relaxation techniques.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented along with an unconditioned stimulus.

Spontaneous Recovery

A phenomenon in psychology where previously extinguished responses re-emerge after a pause without further conditioning.