What is the most important factor affecting the risk of management fraud?
A)Lack of integrity.
B)Lack of internal controls
C)Lack of board of director involvement in organization.
D)Lack of audited financial statements.

Question

Quizplus · Accepted Answer

Lack of integrity is the most important factor affecting the risk of management fraud. Management fraud is a deliberate act by management to deceive shareholders, investors, and lenders for their own personal gain. Lack of integrity means that management may be more likely to engage in fraudulent behavior in order to achieve personal gain or to cover up poor business decisions. Internal controls, board involvement, and audited financial statements can all help to prevent fraud, but the lack of integrity is the root cause of fraudulent behavior.

What Is the Most Important Factor Affecting the Risk of Management