Should nonfinancial indicators be used for assessing fraud risk? Why or why not?
a. No. A company's financial statement data need not always be consistent with its nonfinancial measures.
b. Yes. Management can more easily manipulate financial numbers but finds it harder to keep all the nonfinancial information consistent with the financial information.
c. No. Nonfinancial measures are indicative of physical assets alone.
d. Yes. Management attempts to commit fraud first show up in these indicators. Financial statement fraud is an attempt to cover up those attempts.
b
FEEDBACK: a. Incorrect.
b. Correct.
c. Incorrect.
d. Incorrect.
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Answer the following statement true (T) or false (F)
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