Multiple Choice
In the context of the Fraud Triangle, how can excessive risk-taking by management impact a company's financial reporting?
22
views
6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
According to the fraud triangle, which of the following elements is most likely increased when a small business has suffered from a cyber-attack?
A
Internal control strength
B
Financial statement accuracy
C
Employee satisfaction
D
Perceived opportunity
Verified step by step guidance1
Understand the fraud triangle: The fraud triangle consists of three elements that contribute to fraudulent behavior—pressure, opportunity, and rationalization.
Focus on the element of 'opportunity': In the context of the fraud triangle, 'opportunity' refers to the circumstances that allow fraud to occur, such as weak internal controls or vulnerabilities.
Analyze the impact of a cyber-attack: A cyber-attack can expose weaknesses in a business's systems, creating or increasing perceived opportunities for fraud due to compromised security measures.
Evaluate the other options: Internal control strength would likely decrease, not increase, after a cyber-attack. Financial statement accuracy and employee satisfaction are not directly related to the fraud triangle in this scenario.
Conclude that the correct answer is 'Perceived opportunity,' as it aligns with the increased likelihood of fraud due to vulnerabilities exposed by the cyber-attack.
4:54mWatch next
Master Fraud and the Fraud Triangle with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Fraud and the Fraud Triangle practice set
Problem sets built by lead tutorsExpert video explanations