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Required information

$[$The following information applies to the questions displayed below.$]$

Management fraud $($e$.$g$.,$ fraudulent financial reporting$)$ is a relatively rare event. However, when it does occur, the frauds $($e$.$g$.,$ Enron and WorldCom$)$ can have a significant effect on shareholders, employees, and other parties. The PCAOB's AS $2401,$ Consideration of Fraud in a Financial Statement Audit, provides the relevant guidance for auditors.

b$.$ Select the three conditions that are generally present when fraud occurs:

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.

$?$ Management or other employees have an incentive or are under pressure that provides a reason to commit fraud.

$?$ Circumstances exist that provide an opportunity for a fraud to be carried out.

$?$ Those involved are able to rationalize committing a fraudulent act. Some individuals possess an attitude, character, or set of ethical values that allow them to knowingly and intentionally commit a dishonest act.

$?$ Those involved have less than a high$-$school education.

$?$ Those involved have no religious affiliations.

$?$ Those involved are in their first year at the company.