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Answer:
The correct answer is:
The chief financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts. (d.)
Explanation:
Internal fraud refers to the activities that lead to unexpected financial, material or reputational loss, resulting from the fraudulent actions of internal persons in a firm. Fraudulent activities are broadly divided into two groups: Fraudulent financial reporting and Misappropriation of assets.
Misappropriation of assets therefore, is the actual stealing or the diversion of an organization's assets for personal use or other use other than to the benefit of the organization. In the options given in the question, all the options except option 'd' are examples of the misappropriation of assets, because there is a direct or indirect theft of the assets(cash or tangible asset) for a use other than the company's, However, option 'd', 'The chief financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts', is an error of original entry'. This is also not fraudulent because adding an amount to receivable is not suspicious of stealing money, it most likely is a mistake. Other misappropriation of asset examples include:
skimming: theft of cash before recording in the journals, credit card abuse, fictitious vendor schemes, ghost employees, fictitious expenditure, etc.
A warehouse employee brings home two units of electronic entertainment inventory per week without authorization. The correct option is 'D'.
What is Misappropriation of Assets?
Internal fraud directs to the activities that lead to unexpected financial, material, or reputational loss, resulting from the dishonest actions of internal persons in a firm. Defrauding activities are broadly divided into two groups: Defrauding financial reporting and also Misappropriation of assets.
Misappropriation of assets is the confirmed stealing or the diversion of an organization's assets for personal use or different use other than to the benefit of the organization.
In the choices given in the query, all the options except option 'd' are illustrations of the misappropriation of assets, because there is a direct or indirect theft of the assets(cash or tangible asset) for a use different than the company's, However, option 'd', 'The principal financial officer of the company falsely adds $20 million to the accounts receivable and revenue accounts', is a mistake of original entry.
This is also not fraudulent because adding an amount to receivable is not suspicious of stealing money, it most likely is an error. Different misappropriations of asset examples include:
skimming: robbery of cash before registering in the journals, credit card abuse, fictitious vendor schemes, fictitious expenditure, ghost employees, etc.
Find more information about Misappropriation of Assets here:
https://brainly.com/question/26475213
