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Unformatted text preview: Perceived pressure is one of the three key ingredients which people use to perpetrate a fraud. Harris is both worried about the competition’s ability to undercut the company’s prices. Harris cannot come up with a way to cut any more costs to continue to match the competition’s price strategy. She is also very concerned about a possible reduction in the division managers’ salaries and bonuses. 3. What rationalization did Harris use to justify her fraud? Harris knew that there were few controls in place over inventory. She would be able to manipulate an area under her control to appear more profitable and thought of this as a short-term solution. She didn’t think the competition would be able to keep the reduced price going for much longer or they would go bankrupt and then she could fix the misstatements in inventory without any consequences....
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This note was uploaded on 03/08/2011 for the course ACCT 345 taught by Professor N/a during the Summer '10 term at Mountain State.
- Summer '10