Which of the Following Factors Does Not Make Frauds More

question 36

Multiple Choice

Which of the following factors does not make frauds more difficult to detect?

• A) Collusion with outsiders
• B) Forgery, which GAAS auditors are not trained to detect
• C) Off-book frauds in which no records on the company's books are fraudulent
• D) None of the above

---

Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, resulting in the average cost per unit of output decreasing with increasing scale.

Conglomerate Merger

A type of merger where two companies operating in unrelated business areas combine their operations.

Diversification

An investment strategy to reduce risk by allocating investments amongst various financial instruments, industries, or other categories.

Perspective of Stockholders

The viewpoint or interests of shareholders in a corporation, often focused on return on investment, governance, and financial health.