Which of the following does NOT represent an increased opportunity to commit fraud?
A) Related Party Transactions
B) the company founder is the CEO and Chairman of the Board
C) the financial statements involve accounting estimates
D) the company is a new audit client for the CPA firm

Question

Quizplus · Accepted Answer

A new audit client provides a decreased opportunity to commit fraud as there has not been a history of fraudulent behavior within the company. The other choices all represent increased opportunities for fraud. Related party transactions can be used to manipulate financial statements, having a single individual serve as both CEO and Chairman of the Board can lead to a lack of oversight and a concentration of power, and accounting estimates can be manipulated to reflect desired numbers.

Which of the Following Does NOT Represent an Increased Opportunity