Fraudulent financial reporting is a business reality.While it cannot be eliminated, the risk of fraudulent reporting can be decreased.Which of the following considerations is least likely to lessen that risk?
A)An independent audit committee
B)An internal audit function
C)An increased focus on tying bonuses to short-term company performance
D)Vigilant management

Question

Quizplus · Accepted Answer

Tying bonuses to short-term company performance may actually increase the risk of fraudulent financial reporting, as it can create pressure to meet certain financial targets even if it means misrepresenting the company's financial position. In contrast, the other options - an independent audit committee, an internal audit function, and vigilant management - all provide checks and balances that can help detect and prevent fraudulent reporting.

Fraudulent Financial Reporting Is a Business Reality