Fraud Is More Prevalent in Smaller Businesses and Not-For-Profit Organizations

question 111

Multiple Choice

Fraud is more prevalent in smaller businesses and not-for-profit organizations because it is more difficult for them to maintain

• A) adequate separation of duties.
• B) adequate compensation.
• C) adequate financial reporting standards.
• D) adequate supervisory boards.

---

Definitions:

Manufacturing Overhead Cost

Indirect factory-related costs that are incurred when producing a product, such as utilities, depreciation, and maintenance.

Variable Cost Per Unit

The cost, which varies with the level of output, of producing one unit of a product.

Variable Cost

Payments that adjust in direct relation to the amount of production or sales, including raw materials and direct labor.

Total Variable Cost

The sum of all variable costs that change with the level of production, including materials, labor, and variable overhead.