Question
5) Misappropriation of assets is perpetrated by: A) employees. B) top management. C) both A and B D) none of the above 6) How can
5)
Misappropriation of assets is perpetrated by:
A)
employees.
B)
top management.
C)
both A and B
D)
none of the above
6)
How can profit smoothing can be achieved?
A)
understating allowance for doubtful accounts in periods of higher earnings
B)
reducing the value of inventory of an acquired company at the time of acquisition resulting in higher earnings when the assets are later sold
C)
understating inventory obsolescence reserves in periods of higher earnings
D)
none of the above
7)
What does a company hope to achieve by manipulating earnings?
A)
meet debt covenant restrictions
B)
artificially inflate share prices
C)
meet analysts' forecasts or benchmarks such as prior-year earnings
D)
all of the above
.
8)
Which of the following is a condition of the fraud triangle?
A)
incentives/pressures to commit fraud
B)
attitudes/rationalisation for committing fraud
C)
opportunities to commit fraud
D)
all of the above
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