Red Flags, Symptoms of Fraud, Often Go Unnoticed or Are

question 16

Multiple Choice

Red flags, symptoms of fraud, often go unnoticed or are not vigorously pursued because:

• A) there is not supporting evidence of fraud.
• B) the red flags are not associated with financial statement preparation.
• C) there are many red flags in day-to-day operations that are not fraud indicators.
• D) the audit committee is involved in other investigations.

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Definitions:

Economic Model

A simplified representation of economic processes, used to analyze and predict economic behaviors.

Financial Crisis

A broad term for a variety of situations in which some financial assets suddenly lose a large part of their nominal value, often leading to a collapse of markets and economies.

Economic Model

A simplified representation of reality used to analyze and predict economic behaviors and outcomes.

Opportunity Costs

Refers to the benefits or gains a person or organization misses out on when choosing one alternative over another.