Identify the True Statement About Detecting Fraud Using Financial Statement

question 6

Multiple Choice

Identify the true statement about detecting fraud using financial statement reports.

• A)Performing horizontal analysis requires converting the financial statement balances to percentages of total assets or gross sales.
• B)Vertical analysis is the most direct method of focusing on changes from period to period.
• C)Before performing a data-driven analysis that targets fraud and corruption in financial statements,all three types of financial statements need to be converted to change statements.
• D)Small frauds may not affect the summarized financial statements significantly to be detected.

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Definitions:

Classical Conditioning

The learning method that occurs through repeated pairings of two stimuli, resulting in a response that at first is triggered by the second stimulus but in time is triggered by the first stimulus.

Operant Conditioning

The act of learning in which the intensity of a behavior is transformed by the application of rewards or punishments.

Instrumental Learning

Also known as operant conditioning, it is a learning process through which the strength of a behavior is modified by reinforcement or punishment.

Biological Predispositions

Innate tendencies or propensities intrinsic to an individual's biology that may influence behaviors, traits, or disease vulnerabilities.