You Are Assessing the Fraud Risks at Your Client,Bourdain Industries,Inc

question 65

Multiple Choice

You are assessing the fraud risks at your client,Bourdain Industries,Inc.Which of the following would be considered an example of the opportunity component of the fraud triangle?

• A)The company is required by the bank to maintain a debt-to-equity ratio no higher than 2 to 1 and a current ratio of 1.5 or higher.
• B)Management's compensation package includes stock options and a bonus tied to company profits.
• C)A prevalent sentiment amongst employees is that the company is flush with funds and could easily afford a small loss of assets.
• D)The company generates the bulk of its revenues via cash-based transactions and at any one time a high balance of cash is kept on hand.

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Definitions:

Prosopagnosia

A brain-based condition where the recognition of faces is impaired, commonly referred to as face blindness.

Subliminal Stimulation

The process of influencing an individual's mind below the threshold of conscious perception.

Context Effects

The influence of environmental factors on one's perception, cognition, or behavior in a given situation.

Sensory Adaptation

The method through which sensory detectors decrease in sensitivity towards unvarying or steady stimuli over a period.