Management fraud generally refers to
A) Unintentional mistakes.
B) Noncompliance.
C) Intentional distortions of financial statements.
D) Violations of GAAS.

Question

Quizplus · Accepted Answer

Management fraud involves intentional distortions of financial statements to mislead stakeholders, such as investors, creditors, and regulators. It is considered a serious violation of ethical and legal standards in accounting and business. Option A is incorrect because unintentional mistakes are classified as errors, not fraud. Option B is incorrect because noncompliance refers to failure to follow applicable laws and regulations, which may or may not involve fraud. Option D is incorrect because violations of GAAS (Generally Accepted Auditing Standards) may point to deficiencies in auditing practices, but do not necessarily indicate fraud by management.

Management Fraud Generally Refers to