Final Answer:
According to the study by the Committee of Sponsoring Organizations (COSO), the average financial statement fraud lasts for 18 months. So, the correct option is 2) 18 months.
Step-by-step explanation:
Financial statement fraud, as investigated by COSO, endures for an average duration of 18 months. This finding indicates a considerable period during which fraudulent activities manipulate financial records to deceive stakeholders. This duration underscores the complexity and deliberation involved in perpetrating such fraudulent acts.
Fraudulent activities within financial statements tend to persist for an extended period before detection, lasting an average of 18 months. This timespan is significant as it illustrates the challenge of early identification and prevention, pointing to potential vulnerabilities in the oversight and control mechanisms within organizations. Detecting and mitigating these fraudulent actions demand robust internal controls and vigilant monitoring.
The COSO study's conclusion of an 18-month average duration highlights the sophistication and intricacy of fraudulent schemes. Such prolonged durations emphasize the need for continual vigilance, proactive measures, and stringent internal audits to uncover and prevent fraudulent activities within financial statements. Detecting these fraudulent activities earlier can minimize financial losses and uphold the integrity of financial reporting.
Understanding the duration of financial statement fraud aids in shaping preventive measures, emphasizing the importance of implementing rigorous controls and ethical practices to mitigate the risk and potential impact of such fraudulent activities on businesses and stakeholders.
So, the correct option is 2) 18 months.