In comparing management fraud with employee fraud, the auditor's risk of failing to discover the fraud is
A) greater for management fraud because managers are inherently more deceptive than employees.
B) greater for management fraud because of management's ability to override existing internal controls.
C) greater for employee fraud because of the higher crime rate among blue collar workers.
D) greater for employee fraud because of the larger number of employees in the organization.

Question

Quizplus · Accepted Answer

Management fraud is more difficult to detect due to management's overall control and authority over the organization, including the ability to override internal controls. Employee fraud, while still a concern, is typically easier to detect as it typically involves lower level employees and smaller values compared to management fraud.

In Comparing Management Fraud with Employee Fraud, the Auditor's Risk