When analyzing accounts for fraud risk,
A) companies will generally attempt to overstate accounts payable and net income.
B) the inventory account is generally not susceptible to fraud since the auditor must verify the existence of the inventory.
C) payroll is rarely a significant risk for fraudulent financial reporting.
D) fixed assets are rarely stolen because of their large size.

Question

Quizplus · Accepted Answer

Payroll is rarely a significant risk for fraudulent financial reporting because it is typically well-documented and subject to internal controls, making it less susceptible to manipulation compared to other accounts.

When Analyzing Accounts for Fraud Risk