Which of the following is NOT an example of financial statement fraud:
A)The sales manager records as a sale a large shipment of finished goods on January 1, 20X1, the day after year-end in order to earn a large bonus
B) The financial controller increases monies in the reserve account in order to meet analysts' expectations regarding earnings
C) The CEO insists that the payment for current year accrued bonuses be deferred to the next fiscal year
D) The treasurer transfer money from one bank account to another in order to mask a shortage

Question

Which of the following is NOT an example of financial statement fraud: 
A)The sales manager records as a sale a large shipment of finished goods on January 1, 20X1, the day after year-end in order to earn a large bonus
B) The financial controller increases monies in the reserve account in order to meet analysts' expectations regarding earnings
C) The CEO insists that the payment for current year accrued bonuses be deferred to the next fiscal year
D) The treasurer transfer money from one bank account to another in order to mask a shortage

Quizplus · Accepted Answer

While deferring payment of accrued bonuses may be unethical, it is not an example of financial statement fraud. Financial statement fraud involves intentional misrepresentation or manipulation of financial statement information to deceive stakeholders. The other options involve misrepresenting financial information in some way, which qualifies as financial statement fraud.

Which of the Following Is NOT an Example of Financial