​Which of the Following Is a True Statement Regarding the Fraud

question 24

Multiple Choice

​Which of the following is a true statement regarding the fraud scale depicted in the text?

• A)​The greater the perceived opportunity to commit fraud, the less rationalization is takes to commit fraud.
• B)​The more dishonest a person is, the higher the need to rationalize the fraud act.
• C)​When the financial pressure increases, even low perceived opportunity is sufficient to commit fraud.
• D)​As the 'need' to gamble increases, rationalization to commit fraud becomes easier.

Realize the necessity for vigilance regarding accounting distortions and their impact on financial analysis.

Understand the definitions and calculations of key financial metrics, such as return on assets and asset turnover.

Recognize the importance of analyzing operating profits, profit margins, and their contributing factors.

Acknowledge the strategies for achieving superior performance and competitive advantage.

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Definitions:

Fixed Cash Outflows

Regular, set payments made by a business, such as rent, salary payments, and loan repayments.

Operating Leverage

An indicator of how increases in revenue lead to rises in operational profit, reflecting the company's balance of fixed to variable expenses.

Fixed Costs

Expenses that do not vary with production level or sales volume, such as rent, salaries, and insurance premiums.

Rent

Payment made by a tenant to a landlord for the use of a property.