Which type of misstatement is always a fraud?
A) sales included in the journals for which no shipment was made
B) sales to related parties, such as officers and subsidiaries
C) shipments made to nonexistent customers and recorded as sales
D) sales recorded more than once

Question

Quizplus · Accepted Answer

Shipments made to nonexistent customers and recorded as sales are always intentional misstatements and therefore qualify as fraud according to auditing standards. The other options may also indicate fraud, but they could also be errors or mistakes.

Which Type of Misstatement Is Always a Fraud