Management of Premium Discovery Company Is Compensated Through Large Salaries,stock

question 38

Multiple Choice

Management of Premium Discovery Company is compensated through large salaries,stock options,and bonuses tied to the company's working capital growth.The CEO is constantly holding meetings to ensure that management is on target for increased operating income each month.Based solely on the preceding information,which element of the fraud triangle exists at the Premium Discovery Company?

• A)Incentive.
• B)Opportunity.
• C)Rationalization.
• D)Expectation.

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Definitions:

Conservation

Conservation refers to the principle in cognitive psychology that certain physical characteristics of objects remain the same even when their outward appearance changes.

Ego Centrism

A cognitive bias where an individual perceives, interprets, and judges the world primarily from their own perspective.

Secure Attachment

A healthy attachment style established in early life, characterized by trust, a sense of security, and a positive view of self and others.

Object Permanence

Acknowledging that objects still endure even when they're beyond our sensory detection like sight or hearing.