When misappropriation of assets occurs,
A)management failed to provide adequate employee procedures
B)improper authorization of duties has occurred
C)internal controls are often weak or not properly designed to prevent fraud
D)the misappropriation may cause the company to issue fraudulent financial statements
E)physical controls were not adequate to limit access to assets
F)both A and B
G)both C and D

Question

Quizplus · Accepted Answer

Misappropriation of assets can occur due to weak or improperly designed internal controls, and it may cause the company to issue fraudulent financial statements. Management's failure to provide adequate employee procedures and improper authorization of duties may also contribute to the occurrence of misappropriation, but they are not the main causes. Inadequate physical controls could limit access to assets, but they are not necessarily the primary reason for misappropriation.

When Misappropriation of Assets Occurs