Final answer:
To conceal embezzlement, the perpetrator would most likely increase expenses because this decreases net income and stockholders' equity, which can balance the left side reduction without immediate suspicion.
Step-by-step explanation:
To conceal the theft of assets, which reduces the left side of the accounting equation, the embezzler would have to find a way to reduce the right side as well. The right side of the accounting equation consists of liabilities and stockholders' equity. One of the options available could be increasing expenses, as this would decrease net income and therefore reduce stockholders' equity, balancing out the theft on the assets side without raising immediate suspicion like the other actions might.
The perpetrator would unlikely choose to reduce accounts payable because this action actually increases net worth unless it is coupled with a cash outlay, which would further complicate the concealment. Paying dividends also increases assets and decreases equity but would be conspicuous if not in line with company policy or financial performance. Altering stock accounts would usually be too transparent and could easily be discovered through external audits or by the company's shareholders.