Multiple Choice
Under the concept of the fraud triangle, how is an intentional misrepresentation in financial statements typically penalized under U.S. law?
5
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
Which of the following is at the core of most business failures?
A
Excessive inventory
B
Fraud
C
High employee turnover
D
Technological innovation
Verified step by step guidance1
Understand the context of the question: The problem is asking about the primary cause of business failures, which requires analyzing the options provided.
Evaluate 'Excessive inventory': Excessive inventory can lead to cash flow issues and increased storage costs, but it is not typically the core reason for most business failures.
Evaluate 'Fraud': Fraud involves intentional deception for personal or financial gain and can severely damage a business's financial health, reputation, and trust, making it a significant factor in business failures.
Evaluate 'High employee turnover': High employee turnover can increase recruitment and training costs and disrupt operations, but it is not usually the primary cause of business failures.
Evaluate 'Technological innovation': While technological innovation can challenge businesses to adapt, it is generally an opportunity rather than a core reason for failure. Fraud stands out as the most critical factor among the options provided.
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