Frauds Are More Likely to Occur In

question 45

Multiple Choice

Frauds are more likely to occur in:

• A) large, historically profitable companies.
• B) companies with an active board of directors.
• C) smaller companies where one or two individuals have almost all control in decision making.
• D) any company, as the probability of a fraud does not change with the size of a company.

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Definitions:

Duty of Collaboration

An obligation for parties in a business relationship to work together in good faith to achieve mutual goals.

Duty of Indemnification

The obligation to compensate for harm or loss incurred by another party, typically outlined in a contract.

State Law

The body of law issued and enforced by a state government, distinct from federal or municipal law.

Fiduciary

A person who has a duty to act primarily for another person’s benefit.