- CFA Exams
- CFA Level I Exam
- Study Session 9. Financial Reporting and Analysis (4)
- Reading 29. Financial Reporting Quality
- Subject 3. Context for Assessing Financial Reporting Quality
CFA Practice Question
According to SAS 99, which of the following is least likely to be a risk factor related to opportunities to commit fraudulent accounting?
A. The nature of the firm's industry involves highly complex transactions, especially those close to the period end, which pose difficult "substance over form" issues.
B. It's difficult to determine who is in control due to a complex organizational structure.
C. Significant declines in customer demand and increasing business failures in either the industry or overall economy exist.
Explanation: This factor is related to pressures.
User Contributed Comments 3
| User | Comment |
|---|---|
| jgraham6 | Fraud Triangle = Opportunity + Incentive/Pressure +Rationalization |
| 1INHTJR | But the question say least likely....not most likely |
| tferik | The question asks about opportunities to commit fraud. C is related to pressure to commit. |