Certain conditions and circumstances are often present when management fraud occurs. Which of the following is not such a condition or circumstance?
A)Unfavorable industry conditions.
B)Lack of working capital.
C)High liquidity.
D)Slow customer collections.

Question

Quizplus · Accepted Answer

High liquidity would not typically be a condition or circumstance for management fraud as having ample cash on hand would not necessarily incentivize fraudulent behavior. On the other hand, unfavorable industry conditions, lack of working capital, and slow customer collections could all create pressure for management to fraudulently manipulate financial statements.

Certain Conditions and Circumstances Are Often Present When Management Fraud