When management fraud occurs, companies usually:
A) overstate assets and net income.
B) understate assets and net income.
C) overstate assets and understate net income.
D) understate assets and overstate net income.

Question

Quizplus · Accepted Answer

Management fraud involves intentionally misleading financial statements to make the company appear more profitable or financially stable than it actually is. Therefore, the most common method of management fraud is to overstate assets and net income.

When Management Fraud Occurs, Companies Usually