A potential fraud risk associated with debt is the intentional misclassification of short-term debt as long-term debt.

Question

Quizplus · Accepted Answer

Intentionally misclassifying short-term debt as long-term debt can give the impression of a better financial position for the company, as long-term debt is generally considered to be less risky than short-term debt. This misclassification can mislead investors and creditors, making it a potential fraud risk.

A Potential Fraud Risk Associated with Debt Is the Intentional