Your audit team working with a newly acquired client,discovers that there has been fraudulent financial reporting for the past 5 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 most likely to have been involved in the fraud as they hold the highest positions of authority and have access to the financial information and control over the financial reporting process. Middle management may have played a role, but they would have needed the approval and direction of top management. Disgruntled employees may have motives for committing fraud, but typically do not have the access or authority to carry out fraudulent financial reporting. Accountants in charge of preparing financial statements may be involved in the process, but they are not the ones who initiate or direct the fraud, which is typically done by top management.

Your Audit Team Working with a Newly Acquired Client,discovers That