What are the two major classifications of fraud?
A) intent and rationalization
B) misappropriation of assets and materiality
C) misappropriation of assets and fraudulent financial reporting
D) fraudulent financial reporting and intent

Question

Quizplus · Accepted Answer

The two major classifications of fraud are misappropriation of assets and fraudulent financial reporting. The misappropriation of assets involves stealing or misusing an entity's resources, while fraudulent financial reporting involves intentionally misstating financial information to deceive stakeholders. Choice A is incorrect because intent and rationalization represent two components of fraud but not two distinct classifications. Choice B is incorrect because materiality is a concept related to the significance of financial information and not a classification of fraud. Choice D is incorrect because intent is one component of fraud and not a classification.

What Are the Two Major Classifications of Fraud