Unformatted text preview: portunity to commit fraud. c. Generally acts alone, out of embarrassment. d. Feels some sort of pressure or incentive to commit fraud. e. None of the above. 84. A typical lower‐level employee in a public business would engage mostly in which type of crime? a. Fraud. b. Misappropriation of assets. c. Error. d. Embezzlement. e. Lapping. 85. Which financial statement should be studied to determine if a company has the ability to pay a significant debt? a. Balance sheet. b. Shareholder's equity. c. Income statement. d. Cash flow statement. e. Annual budget. 86. Which is not one of the classic "red flags" of "cooking the books"? a. Double billing a customer. b. Personal expenses paid with company funds. c. Sudden raises or bonuses to employees. d. Unnecessary use of collection services. e. Income increasing faster than cash. Page 11 of 44...
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- Summer '10
- c. Rationalization. d., a. Lapping. b., c. Wildcatting. d., a. Opportunity. b., a. Fraud. b., c. Error. d.