Which of the following frauds is most common?
A)Chief financial officer's misappropriation of funds.
B)Misapplication of revenue recognition principles.
C)Management's theft of cash held in reserve accounts.
D)Over-recording expenses related to stock options.

Question

Quizplus · Accepted Answer

Misapplication of revenue recognition principles is the most common type of fraud. This occurs when revenue is recognized prematurely, over a longer period of time than it should be, or even fictitious revenue is recorded. It is a common tactic to inflate financial statements and make a company appear more profitable than it actually is.

Which of the Following Frauds Is Most Common