What Two Business Trends Are Likely to Increase Collusion Fraud

question 2

Multiple Choice

What two business trends are likely to increase collusion fraud?

• A) Emphasis on quarterly earnings targets from analysts
• B) Elimination of middle management
• C) Closer relationships between buyers and suppliers
• D) Increasingly complex nature of business

---

Definitions:

Shares Common Stock

Equity securities that represent ownership interest in a corporation, with rights to dividends and to vote on corporate matters.

Variable Interest Entity

A legal entity in which an investor holds a controlling interest due to contractual agreements rather than owning a majority of voting rights.

Residual Profits

The earnings that remain after deducting all costs, including the cost of capital, from revenues.

Debt Guarantee

An arrangement where a third party promises to assume the debt obligation of a borrower if that borrower defaults.