Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Which of the following is a professional liability for which producers can be sued under the context of fraud and the fraud triangle?

Misrepresentation of financial statements

Following internal controls

Preparing budgets accurately

Paying taxes on time

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Verified step by step guidance

Understand the context of the question: The problem is asking about professional liability related to fraud and the fraud triangle. The fraud triangle consists of three elements: opportunity, pressure (or incentive), and rationalization.

Analyze the options provided: Misrepresentation of financial statements, Following internal controls, Preparing budgets accurately, and Paying taxes on time. Consider which of these could be linked to fraud and the fraud triangle.

Focus on the concept of 'misrepresentation of financial statements': This involves intentionally providing false or misleading information in financial reports, which directly relates to the opportunity and rationalization elements of the fraud triangle.

Evaluate the other options: 'Following internal controls' is a preventive measure against fraud, not a liability. 'Preparing budgets accurately' and 'Paying taxes on time' are standard professional responsibilities but do not directly relate to fraud or the fraud triangle.

Conclude that the correct answer is 'Misrepresentation of financial statements' because it is a professional liability that aligns with the context of fraud and the fraud triangle.