Which of the Following Is an Example of Fraud

question 61

Multiple Choice

Which of the following is an example of fraud?

• A)A mistake in processing accounting data.
• B)An incorrect accounting estimate arising from misinterpretation of facts.
• C)Misappropriation of an asset.
• D)A mistake in the application of accounting principles.

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Definitions:

Direct Method

An approach in accounting for cash flows that lists major cash receipts and payments during a period, providing a clearer picture of how and where cash is generated and used.

Audit Committee

A key committee of a company's board of directors responsible for oversight of financial reporting, audit processes, and compliance matters.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and government agencies.

External Auditors

Independent third parties that review an organization's financial statements to ensure accuracy and compliance with accounting standards.