The Difference Between an Error in the Financial Statements as Compared

question 73

Multiple Choice

The difference between an error in the financial statements as compared to fraud is:

• A) An error is always an intentional act designed to deceive another party
• B) Fraud is always an intentional act designed to deceive another party
• C) An error always leads to a qualification of the auditors' opinion
• D) Fraudulent financial reporting is always material in amount

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Definitions:

Le Bon

A reference to Gustave Le Bon, a French social psychologist best known for his work on crowd psychology and the psychology of revolution.

Large Crowds

refers to gatherings of a considerable number of individuals in a specific location, which can influence behavior, mentality, and social dynamics.

Milgram

Refers to Stanley Milgram, a psychologist known for his experiments on obedience, demonstrating how people are willing to follow authorities even to the extent of harming others.

Confederates

Individuals who are part of a larger group or cause, often used in the context of the American Civil War or in experimental research to describe participants who are in on the experiment's aims.