A smart fraudster usually manipulates which financial record in order to better avoid an audit trail? a. Income statement b. Balance sheet c. Statement of cash flows d. Statement of retained earnings d. The employees know who has responsibility for each business activity. Procedures to follow are in place. Which of the following is NOT a common rationalization of fraud perpetrators? a. The organization owes me. b. I'm only borrowing the money. c. No one will get hurt. d. No one will care. Which of the following observations is true? a. Research shows that only people with a criminal mindset commit fraud. b. Fraud perpetrators usually can be distinguished from others based on psychological characteristics. c. Most fraud perpetrators have profiles that are similar to those of other people. d. When fraud does occur, the most common initial reaction by those involved in the fraud is confession. When management fraud occurs, companies usually: a. overstate assets and net income. b. understate assets and net income. C. overstate assets and understate net income. d. understate assets and overstate net income. An employee who has the responsibilities of both writing checks and making bank deposits would have to commit fraud. a. financial pressure b. a perceived opportunity c. the rationalization d. validation