Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Chapter 2, Problem 27RSCQ
To determine

Introduction: Asset misappropriation fraud refers to the fraud where third-parties or workers of the entity misuse their position for pilfering or exploitation of the assets of the organization. It includes embezzlement of cash, assets stolen, and various other related losses.

Fraudulent financial reporting refers to manipulations of income earned by the management in order to have personal gains or to prevent an organization from bankruptcy or any other negative financial results.

To explain: The reporter’s observation in small organizations where asset misappropriation is more likely to be found, while in large organization, fraudulent financial reporting is more likely to be found.

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Assume that you are interviewed by a student newspaper regarding the nature of accounting fraud. The reporter says, "As I understand it, asset misappropriations are more likely to be found in small organizations, but not in larger organizations. On the other hand, fraudulent financial reporting is more likely to be found in larger organizations." How would you respond to the reporter's observation?
You are asked to be interviewed by a student newspaper regarding the nature of accounting fraud. The reporter says, “As I understand it, asset misappropriations are more likely to be found are more likely to be found in small organizations, but not in larger organizations. On the other hand, fraudulent financial reporting is more likely to be found in larger organizations.” How would you respond to the reporter’s observations?
You are asked to be interviewed by a student newspaper regarding the nature of accounting fraud. the reporter says  "as I understand, it asset misappropriation  are more likely to be found in a small organisation but not in large organisations. on the other hand fradulent financial reporting is more likely to be found in larger organization. how would you respond to the reporters observation?
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