Fraud examiners must be able to recognize signals that a journal entry may have been manufactured to conceal a fraud. Which of the following is a common journal entry fraud symptom?
A) Journal entries with documentary support
B) Journal entries that balance
C) Adjustments to receivables or payables that are made monthly
D) Journal entries made near the end of an accounting period

Question

Quizplus · Accepted Answer

Journal entries made near the end of an accounting period may indicate an attempt to manipulate financial statements or hide fraudulent activity. This is sometimes referred to as "window-dressing" the financial statements. Journal entries with documentary support and entries that balance are actually good signs of proper accounting practices, while adjustments to receivables or payables made monthly are a normal part of the accounting cycle.

Fraud Examiners Must Be Able to Recognize Signals That a Journal