From Accounting Today:
Fraud is not an accounting problem or an internal control problem; it is a human problem. Not even the strongest system of controls can eliminate all risk of organizations’ being defrauded by employees who are sufficiently motivated to find loopholes, ways to override controls, or opportunities for collusion. While most accountants are familiar with methods for identifying manipulated accounting data, effectively fighting fraud involves going further and understanding the human elements involved. Such knowledge can help CPAs design or assess internal control initiatives, recognize fraud red flags during professional engagements, and identify where organizations are most at risk. Take this quiz to see whether your knowledge of fraudsters’ mindsets, characteristics, and behaviors is sufficiently honed to help you recognize the warning signs of fraud.
1. Research has shown that the most common reason that CFOs commit financial statement fraud is:
a. To cover up embezzlement or other fraud schemes.
b. Pressure from CEOs.
c. To increase the value of their own investments in company stock.
d. To hide their own errors or poor judgments that led to weak financial performance.
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