Misappropriation involves:

Misappropriation involves:

• A. Illegal use of property or funds of another for one's own use or unauthorized purpose
• B. Fraudulent financial reporting intended to deceive plan participants
• C. Incentives to commit fraud
• D. External audits

Answer: (A)

Misappropriation means the illegal taking or use of someone else’s property or funds for personal use or for an unauthorized purpose. In employee benefit plans, this would be someone who has access to plan assets diverting or stealing those assets for themselves. It’s about the actual act of theft or personal use of assets, not about how financial information is reported or about motives or audits. Fraudulent financial reporting involves deceiving participants with false numbers; incentives to commit fraud are motives; external audits are controls that help detect or deter misdeeds. So the description that matches misappropriation is the illegal use of property or funds of another for personal use or an unauthorized purpose.

Misappropriation means the illegal taking or use of someone else’s property or funds for personal use or for an unauthorized purpose. In employee benefit plans, this would be someone who has access to plan assets diverting or stealing those assets for themselves. It’s about the actual act of theft or personal use of assets, not about how financial information is reported or about motives or audits. Fraudulent financial reporting involves deceiving participants with false numbers; incentives to commit fraud are motives; external audits are controls that help detect or deter misdeeds. So the description that matches misappropriation is the illegal use of property or funds of another for personal use or an unauthorized purpose.