Which of the following frauds is most common?
A) Chief financial officer misappropriation of funds.
B) Misapplication of revenue recognition principles.
C) Management's theft of cash held in reserve accounts.
D) Over-recording expenses related to stock options.

Question

Quizplus · Accepted Answer

Misapplication of revenue recognition principles is the most common type of fraud according to multiple studies and surveys conducted by organizations such as the Association of Certified Fraud Examiners and PwC. It involves recognizing revenue prematurely or incorrectly in financial statements, which can lead to inflated earnings and misleading financial information. The other options listed are also types of fraud, but are not as commonly reported in studies and surveys.

Which of the Following Frauds Is Most Common