Question

What are the three categories into which disclosure frauds can be categorized?

a) Omission, misclassification, misrepresentation
b) Revenue fraud, expense fraud, asset fraud
c) Tax fraud, audit fraud, shareholder fraud
d) International fraud, national fraud, local fraud

Answer 1

Disclosure frauds can be divided into omission, misclassification, and misrepresentation. These encompass failing to provide necessary information, incorrect categorization of financial data, and intentional provision of misleading data, respectively.

Step-by-step explanation:

Disclosure frauds in the financial context can typically be categorized into three main types: omission, misclassification, and misrepresentation. An omission occurs when a company fails to include necessary and relevant information in its financial statements or reports, potentially misleading stakeholders. Misclassification involves the incorrect categorization of accounts or transactions in the financial statements, which can alter the financial outlook or performance of a company. Lastly, misrepresentation is the act of intentionally providing false or misleading information in financial reports, with the intent to deceive users of the statements.