Your audit team, working with a newly acquired client, discovers that there has been fraudulent financial reporting for the past five years. Who is most likely to have been involved in the fraud?
A) Middle management in positions of trust
B) Disgruntled employees
C) Top management
D) The accountants in charge of preparing the financial statements

Question

Quizplus · Accepted Answer

Top management is often the primary perpetrator in cases of fraudulent financial reporting, as they have the authority and access needed to manipulate financial statements for personal gain. Middle management may also be involved, but it is less likely. Disgruntled employees and accountants in charge of preparing financial statements are unlikely to be the primary perpetrators of fraudulent financial reporting.

Your Audit Team, Working with a Newly Acquired Client, Discovers