Question

Which of the following statements is true about misappropriation of assets?

A. It is generally committed by company employees or management intentionally and represents a fraud rather than А an error. B
B. It harms the users of the financial statements by providing them with incorrect financial data especially those related to the company's assets for their decision making.
C. It causes harm to the stockholders of the company by depriving them of the resources and their availability to rightful owners. D
D. It causes harm to both the users of the financial statements that are misstated and the stockholders of the company since the misappropriation usually involves material amounts.

Answer 1

Misappropriation of assets is an intentional act by employees or management that constitutes a form of corporate crime and fraud. It typically involves the theft or misuse of company assets, such as embezzlement, and can mislead stakeholders.

Step-by-step explanation:

The statement that is true about misappropriation of assets is: It is generally committed by company employees or management intentionally and represents a fraud rather than an error. Misappropriation of assets involves the theft or misuse of an organization's assets and is a form of corporate crime. It can be as simple as an employee stealing office supplies to complex schemes where managers inflate expenses to embezzle money. Regardless, it's intended and fraudulent. An example of corporate crime similar to misappropriation of assets is embezzlement, which is unlawfully taking money by someone to whom it was entrusted, a common form of financial fraud. Misappropriation of assets harms an organization by depleting its resources and potentially misleading stakeholders if reflected in the financial statements.