Table of contents

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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

According to the principles of internal control and the fraud triangle, under which circumstance should inspections not take place?

Inspections should not take place if management trusts all employees.

Inspections should not take place when the company is experiencing high profitability.

There are no circumstances in which inspections should not take place, as regular inspections help prevent and detect fraud.

Inspections should not take place if employees have worked at the company for more than 10 years.

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Verified step by step guidance

Understand the principles of internal control, which emphasize the importance of regular inspections to prevent and detect fraud.

Review the fraud triangle, which highlights three factors that contribute to fraud: opportunity, pressure, and rationalization. Inspections help reduce opportunities for fraud.

Evaluate the given options and recognize that trust, profitability, or employee tenure do not eliminate the risk of fraud. Regular inspections are necessary regardless of these factors.

Acknowledge that the correct principle is that inspections should always take place, as they are a critical component of maintaining internal control and safeguarding assets.

Conclude that there are no circumstances under which inspections should not take place, as they are essential for preventing and detecting fraud in any organization.