Financial Statement Fraud

D

Financial statement fraud is a type of fraud that involves intentionally misrepresenting financial information in order to deceive investors, lenders, or other stakeholders. It can be committed by individuals at all levels of an organization, but is typically carried out by those with access to financial data and decision-making authority.

The correct answer to the question is C. Senior Management. Senior executives, such as the CEO, CFO, or other high-ranking officials, are often responsible for financial statement fraud. They may manipulate financial data in order to hide losses, inflate revenue or profits, or otherwise make the company appear more financially sound than it actually is. This can be done for a variety of reasons, including to maintain stock prices, secure financing, or receive larger bonuses or compensation packages.

While it is possible for financial statement fraud to be committed by organized criminals or mid and lower-level employees, it is much less common. Organized criminals may attempt to defraud companies or investors, but they are more likely to do so through other means, such as identity theft or credit card fraud. Mid and lower-level employees may also attempt to commit fraud, but they are typically not in a position to manipulate financial data to the same extent as senior executives.

In summary, financial statement fraud is most commonly committed by senior management in an organization. While it is possible for others to engage in this type of fraud, it is much less common.