In the fraud triangle, fraudulent financial reporting and misappropriation of assets
A) share little in common.
B) share most of the same risk factors.
C) share the same three conditions of the fraud triangle.
D) share most of the same conditions. of the fraud triangle.

Question

Quizplus · Accepted Answer

Both fraudulent financial reporting and misappropriation of assets share the same three conditions of the fraud triangle, which are opportunity, rationalization, and pressure. Opportunity refers to the ability of an individual to carry out the fraudulent act, rationalization refers to the individual's justification for the fraud, and pressure refers to the individual's motivation to commit the fraud. Therefore, both forms of fraud have the same underlying conditions that can lead to their occurrence.

In the Fraud Triangle, Fraudulent Financial Reporting and Misappropriation of Assets