In the Fraud Triangle, Fraudulent Financial Reporting and Misappropriation of Assets

question 32

Multiple Choice

In the fraud triangle, fraudulent financial reporting and misappropriation of assets:

• A)share little in common.
• B)share most of the same risk factors.
• C)share the same three conditions.
• D)share most of the same conditions.

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Definitions:

Liability

Anything that is owed to other people or institutions.

Stockholders

Individuals or entities that own shares in a corporation, making them partial owners of the company and entitling them to dividends and voting rights.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs.

Ownership of Stock

Holding shares in a company, which represents a claim on its assets and earnings.