Which of the following is an accurate statement regarding the misappropriation of assets?
A) In most cases, the amounts involved are material to the financial statements.
B) Misappropriation of assets can easily increase in size over time and can lead to significant reputational harm.
C) Management should not be concerned about minor misappropriations.
D) Asset misappropriation schemes are less common than fraudulent financial statement schemes.

Question

Quizplus · Accepted Answer

Misappropriation of assets can start small but can escalate quickly over time to become significant, leading to reputational harm for the organization. This is why management should be concerned about even minor misappropriations and take steps to prevent them. In contrast, option A is incorrect as misappropriations can sometimes be immaterial to the financial statements. Option C is incorrect as even minor misappropriations can be indicative of a larger problem and should be addressed. Option D is also incorrect as asset misappropriation schemes are actually more common than fraudulent financial statement schemes.

Which of the Following Is an Accurate Statement Regarding the Misappropriation