Frauds are more likely to occur in
A) Large, historically profitable companies
B) Companies with an active board of directors
C) Smaller companies where one or two individuals have almost all control in decision making
D) The probability of a fraud does not change with the size of a company

Question

Quizplus · Accepted Answer

C: Large companies generally have democratic decision making-spread over many individuals. Also, active audit committees involved in major decisions is an effective management fraud deterrent. In smaller companies, the risk of fraud is higher than it is in larger companies because these companies are not able to operate in this manner.

Frauds Are More Likely to Occur in