Committing a Fraud Because the Employee Feels "I Deserve a Pay

question 92

Multiple Choice

Committing a fraud because the employee feels "I deserve a pay raise. The company owes this to me" is related to what part of the Fraud Triangle?

• A)Realization
• B)Perceived opportunity
• C)Rationalization
• D)Perceived pressure

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Definitions:

Interest Tax Shield

The decrease in income tax liabilities due to permitted interest expense deductions.

Levered Firm

A corporation that has debt in its capital structure, indicating it uses borrowing (leverage) to finance its operations or expansions.

M&M Proposition I

A principle of financial theory stating that under perfect market conditions, the value of a firm is unaffected by how it is financed.

Liquidation

The process of converting assets into cash or cash equivalents by selling them in the market.