Brainstorming About the Manner in Which Fraud May Be Committed

question 75

Multiple Choice

Brainstorming about the manner in which fraud may be committed should include all of the following except

• A)Consider factors that might affect management motivation to misstate the financial statements
• B)Consider weaknesses in internal control that would allow a fraud to take place
• C)Consider the materiality of the individual account balances for substantive testing
• D)Consider factors that may enable an individual capable of committing a fraud to rationalize perpetrating it

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Definitions:

Randomly

Without method or conscious decision, in a way that seems unpredictable or without pattern.

Framing Effect

A cognitive bias where people decide on options based on whether they are presented in a positive or negative way.

Risky Strategy

In decision making, opting for an option with potentially higher rewards but also higher risks, often contrasted with a safe or conservative approach.

Gains

Benefits, improvements, or increases usually achieved through effort, such as in skills, knowledge, or material success.