A smart fraudster usually manipulates which financial record in order to better avoid an audit trail?
A) Income statement.
B) Balance sheet.
C) Statement of cash flows.
D) Both B and C are correct.

Question

Quizplus · Accepted Answer

A: Correct - Income statements report on activity only for a certain period. At the end of that period accounts are closed to zero, thus erasing the audit trail.
B: Incorrect - Balance sheets carry over numbers from period to period, making it harder to conceal fraud.
C: Incorrect - The statement of cash flows also carries over financial data from period to period, making it hard to conceal the fraud over the long term.
D: Incorrect - Since both B and C are incorrect, D must also be incorrect.

A Smart Fraudster Usually Manipulates Which Financial Record in Order