Which of the following is indicative of increased risk of fradulent financial re

Hi, Option D (high-level management is compensated with base salaries alone (i.e., no incentive compensation) is the correct answer. Thanks.

ID: 2504656 • Letter: W

Question

Which of the following is indicative of increased risk of fradulent financial reporting (FFR)?

a. the company's accounting principles require little interpretation or the exercise of judgement by management.

b. the audit committee of the board of directors is heavily invovled in the financial reporting process.

c. financial analysts have foreasted strong EPS for hte company in the next three consecutive quarters.

d. high-level management is compensated with base salaries alone (i.e., no incentive compensation)

Hi,

Option D (high-level management is compensated with base salaries alone (i.e., no incentive compensation) is the correct answer.

Thanks.

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