Presented below are ten conditions noted by an external auditorduring the audit of the financial statements of a client that areconsidered to be fraud risk factors. Indicate the classification ofthe fraud risk factor as:

? Incentives/Pressures

? Opportunities

? Attitudes/Rationalizations

Fraud Risk Factor Classification

1. Significant related-party transaction outside the normalcourse of business

2. Promotions and compensation inconsistent with managementexpectations

3. Significant bank accounts in tax-haven jurisdictions forwhich there is not apparent business justification

4. Excessive interest by management in meeting financial targetsand maintaining stock price

5. Management dominated by an individual with significantfinancial interest in the entity

6. Management refuses to give the auditor permission to performstandard audit procedures

7. Ineffective oversight of management relative to the design,implementation and maintenance of internal controls

8. Declining profits and operating cash flows have created theneed for the entity to seek new financing

9. Failure by management to address known significantdeficiencies in internal controls over financial reporting

10. New accounting standards that are highly-complex and requiresignificant judgments must be implemented