Which of the following is most likely an example of an opportunity that increases the risk that a fraud may have been perpetrated?
A)A high volume of transactions close to year-end
B)A high turnover of clerical staff
C)A high reliance on simple accounting transactions
D)A high amount of depreciation expense

Question

Quizplus · Accepted Answer

A high volume of transactions close to year-end is an opportunity that creates pressure for fraudulent activities such as window dressing. Window dressing is a technique used to improve the appearance of financial statements by manipulating accounts in the final days of the reporting period. This can be done by accelerating revenue recognition, delaying expenses, or manipulating reserves to create a false impression of performance. Thus, it increases the risk of fraud.

Which of the Following Is Most Likely an Example of an Opportunity