Identify the True Statement About Detecting Fraud Using Financial Statement

question 32

Multiple Choice

Identify the true statement about detecting fraud using financial statement reports.

• A)Performing horizontal analysis requires converting the Income statement balances to percentages of gross sales.
• B)Vertical analysis is the most direct method of focusing on changes from period to period.
• C)Before performing any data-driven analysis that targets fraud and corruption in financial statements, the numbers in all three types of financial statements need to be converted to percentages.
• D)Small frauds may not affect the summarized financial statements significantly to be detected.

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Definitions:

Health Psychology

A branch of psychology focused on how biological, psychological, and social factors affect health and illness.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight-or-flight response during stressful situations.

Peripheral Nervous System

Part of the nervous system outside the brain and spinal cord, responsible for connecting the CNS to limbs and organs.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, including heart rate, digestion, and respiratory rate.