The Auditor Determines That Mathews Company Occupies the 3ʳᵈ Floor

question 25

Multiple Choice

The auditor determines that Mathews Company occupies the 3ʳᵈ floor of an office tower for which it pays no rent.The most likely explanation is:

• A)they got lucky the landlord hasn't noticed the lack of payments.
• B)landlord has weak internal controls over billings.
• C)a related party transaction in which a major shareholder owns the office tower.
• D)Matthews Company is engaging in fraudulent activities.

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Definitions:

Wealthy People

Individuals possessing a significant amount of capital, assets, or resources, well above the financial average of the general population.

Ill-Gotten Gains

Profits or benefits acquired dishonestly or through unethical means.

Just-World Phenomenon

A cognitive bias that leads individuals to believe that the world is inherently fair, leading them to rationalize an unwarranted, good or bad situation as deserving.

Natural Disaster

Severe, catastrophic events resulting from natural processes of the Earth, such as earthquakes, floods, hurricanes, and volcanic eruptions.