Which of the following is a common incentive or condition which increases the likelihood for fraudulent financial reporting?
A) Ineffective segregation of assets.
B) Addictions to gambling or drugs.
C) Pending stock option expirations.
D) Access to undeposited cash.

Question

Quizplus · Accepted Answer

Pending stock option expirations can create pressure on management to manipulate financial statements in order to meet earnings targets and artificially inflate the company's stock price. This type of incentive is a common driver of fraudulent financial reporting. The other choices, while they may create opportunities for fraud, are not as commonly associated with fraudulent financial reporting.

Which of the Following Is a Common Incentive or Condition