In: Accounting
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 |
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.