Multiple Choice
Which term describes an action that can damage or compromise an asset?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which of the following is NOT a component of money laundering?
A
Rationalization
B
Placement
C
Layering
D
Integration
Verified step by step guidance1
Understand the concept of money laundering: Money laundering is the process of disguising the origins of illegally obtained money to make it appear legitimate. It typically involves three main components: Placement, Layering, and Integration.
Define each component: Placement refers to introducing illicit funds into the financial system. Layering involves separating the funds from their illegal source through complex transactions. Integration is the process of making the funds appear legitimate by reintroducing them into the economy.
Analyze the term 'Rationalization': Rationalization is not a component of money laundering. It is a psychological concept often associated with the justification of unethical behavior, but it does not directly relate to the mechanics of money laundering.
Compare the options: Placement, Layering, and Integration are all recognized components of money laundering. Rationalization, however, does not fit within the framework of these processes.
Conclude that Rationalization is the correct answer as it is NOT a component of money laundering.
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