Select the correct answer from the choices A, B, C, D which are given. 1. What is the primary difference between frand and error in financial staternent reporting? a. The materiality of the misstatement. b. The intent to deceive. c. The level of management involved. d. The type of transaction effected. 2. Which of the following best represents an example of fraudulent financial reporting? a. The transfer agent issues 40,000 shares of the company's stock to a friend without authorization by the board of directors. b. The controller of the company inappropriately reconds January sales in December so that year-end results will meet analysts' expectations. c. The in-house attorncy receives payments from the French govemment for negotiating the development of a new plant in Paris. d. The accounts receivable clerk covers ep the theft of cash receipts by writing off older receivables without authorization. 3. Which of the following factors creates an opportunity for fraud to be committed in an organization? a. Management demands financial success. b. Poor internal control. c. Commitments tied to debt covenants. d. Management is aggressive in its application of accounting rules. 4. Which of the following types of transactions did Company management engage in as part of that company's fraudulent financial reporting scheme? a. Recorded barter transactions as sales. b. Used restructuring reserves from prior acquisitions to decrease expenses. c. Capitalized line costs rather than expensing them. d. All of the above. 5. A scheme where the perpetrator steals the cash or check that customer A mails in to pay its accounts receivable, then the perpetrator takes the funds from customer B to later cover that account. And so on with Customer a. Computer fraud b. Employee fraud c. Employee fraud d. Lapping