During audit planning, an auditor obtained the following information:
1. Management has a strong interest in employing inappropriate means to minimize reported earnings for tax- motivated reasons.
2. Assets and revenues are based on significant estimates that involve subjective judgments and uncertainties that are hard to corroborate.
3. The company is marginally able to meet exchange listing and debt covenant requirements.
4. Significant operations are located and conducted across international borders in jurisdictions where differing business environments and cultures exist.
5. There are recurring attempts by management to justify marginal or inappropriate accounting on the basis of materiality.
6. The company’s financial performance is threatened by a high degree of competition and market saturation.
REQUIRED
Classify each of the six factors into one of these fraud conditions: incentives/pressures, opportunities, or attitudes/rationalization.