Which of the Following Statements Regarding Fraud Is True

question 35

Multiple Choice

Which of the following statements regarding fraud is true?

• A) Fraud is a deliberate act.
• B) Fraud can be deliberate or unintentional.
• C) A company with a strong code of ethics can eliminate fraud.
• D) A company with strong internal controls can eliminate fraud.
• E) The most common type of fraud is financial statement fraud.

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Definitions:

Related Parties

Individuals or entities that have a relationship with the reporting entity that can influence financial transactions or balances due to this relationship.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities that go into their production rather than on a simple allocation basis.

Charging Products

The process of setting a price for a product or service, often seen in context with digital or electrical items but broadly applicable.

Bottleneck

A point of congestion in a production system that occurs when workloads arrive too quickly for the process to handle, significantly slowing down production.