Final answer:
Financial statement frauds are falsely believed to occur most often in large, established companies; however, they can occur in any size of company. High-profile cases have led to the Sarbanes-Oxley Act to protect investors and ensure accurate financial disclosures.
Step-by-step explanation:
The statement that financial statement frauds most often occur in large, well-established companies is false. Financial statement fraud can happen in companies of all sizes, but high-profile cases in large corporations tend to garner more public attention. Major accounting scandals at well-known companies, such as Enron, Tyco International, and WorldCom, have famously highlighted the devastating effects of financial frauds. These events led to the enactment of the Sarbanes-Oxley Act in 2002, which aimed to protect investors by increasing the accuracy and reliability of corporate disclosures and holding company executives accountable for the accuracy of financial statements.