Which of the following is a valid reason behind the prevalence of revenue-related financial statement fraud?
a. It is easy to manipulate net income using revenues and receivables accounts.
b. Revenue-related frauds are difficult to hide from detection.
c. A reversing effect of the fraud automatically occurs in the subsequent period.
d. Auditors generally focus more on balance sheet items than on revenue accounts.
a
FEEDBACK: a. Correct. Revenue accounts are easily manipulated by creating fictitious receivables.
b. Incorrect.
c. Incorrect.
d. Incorrect.
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