Which of the following situations does not represent an opportunity to commit fraud?
A)Significant related-party transactions exist.
B)The auditor's relationship with management is strained.
C)Management is dominated by a single person.
D)The financial report includes highly subjective estimates.

Question

Quizplus · Accepted Answer

A strained relationship between the auditor and management could potentially hinder the audit process and make it more difficult to uncover fraud, but it does not necessarily create an opportunity for fraud to occur. The other three situations listed all involve factors that could create an opportunity for fraud to be committed.

Which of the Following Situations Does Not Represent an Opportunity