Who Is Most Likely to Perpetrate Fraudulent Financial Reporting

question 63

Multiple Choice

Who is most likely to perpetrate fraudulent financial reporting?

• A)Members of the board of directors
• B)Production employees
• C)Management of the company
• D)The internal auditors

---

Definitions:

Drawing and Capital Accounts

These refer to accounts used in partnerships and sole proprietorships where the 'drawing account' tracks withdrawals made by the owner(s) for personal use, and the 'capital account' tracks the owner's invested equity and retained earnings in the business.

Sole Proprietorship

A sole proprietorship is a business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Distribution of Cash

The process of allocating cash dividends to shareholders based on the number of shares held.

Income-Sharing Ratio

The proportion at which partners in a partnership agreement divide profits and losses among themselves.