Practice Quiz

Forensic Accounting

Category - Specialized Forensic Knowledge

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What effect does exclusive fraud have on interest expense?
  1. Understated
  2. Overstated
  3. No change
  4. None of the above
Explanation
Answer: B - When there is an occurrence of exclusive fraud, interest expenses are understated. This generally occurs because exclusive fraud refers to the omission of key information, and such type of fraudulent reporting tends to overstate the ‘interest expense’ balance.
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