Question

In: Accounting

Which of these is most related to "incentives or pressures" in the fraud triangle?

Which of these is most related to "incentives or pressures" in the fraud triangle?



management generally sets realistic forecasts and budgets


management is under strong pressure to meet debt covenants


the company has a high turnover of information technology staff


the financial statements include estimates that involve significant judgement

Solutions

Expert Solution

Your required answer is option B i.e. Management is under strong pressure to meet debt covenants.

Explanation:

Since most of project is started by taking debt and therefore on management they have excessive pressure to meet debt repayment which encourage/pressurize management to commit fraud.


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