Auditing & Assurance Services 6th Edition by Timothy Louwers

Exercise 3

Fraud risk factors are events or conditions that indicate I. An incentive or pressure to perpetrate fraud. II. An opportunity to carry out the fraud. III. An attitude or rationalization that justifies the fraudulent action. Which of the following statements is true?
A) I is a fraud risk factor.
B) I and II are fraud risk factors.
C) II and III are fraud risk factors.
D) None of these is a fraud risk factor.
E) I, II, and III are fraud risk factors.