Final answer:
The correct answer is that all the provided choices increase the risk of fraud: operating in a competitive industry, reporting a history of losses, and linking a significant portion of management's pay to earnings. So the all of these answer choices are correct.
Step-by-step explanation:
An example of an incentive or pressure that increases the risk of fraud is: all of these answer choices are correct. This includes operating in a highly competitive industry, having a history of reporting losses, and when a significant percentage of management pay is tied to earnings.
These scenarios can increase pressure on a company to engage in fraudulent behavior to meet earnings targets or maintain a competitive edge. For instance, in a highly competitive industry, a company may feel pressured to falsify financial information to appear more stable or profitable than it is, to attract investors and customers.
Companies with a history of reporting losses might manipulate earnings to avoid market penalties or to secure loans and investments. Lastly, if management pay is closely tied to earnings, individuals may have personal incentives to manipulate financial results to increase their compensation.