Question

A ceo believes that the company should try to keep the stock price high by manipulating the financial statements to protect its shareholders. Which element of the fraud triangle is discussed here?

Answer 1

Answer: Rationalization

Step-by-step explanation:

Here in this scenario, the element of fraud triangle that bis being discussed is the rationalization. Fraud triangle defines 3 factors which are mostly responsible and thus further tend to contribute to the increase in risk of a fraud. These are: Opportunity, Incentive, and Rationalization. Rationalization is referred to as the individual’s reason and excuse for committing a fraud.