Multiple Choice
Which of the following is NOT an example of safeguarding inventory?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is NOT a true statement about fraud?
A
Fraud can only occur in large corporations, not in small businesses.
B
The fraud triangle consists of opportunity, pressure, and rationalization.
C
Internal controls are designed to help prevent and detect fraud.
D
Fraud typically involves intentional deception for personal gain.
Verified step by step guidance1
Understand the concept of fraud: Fraud involves intentional deception for personal gain and can occur in any organization, regardless of size.
Review the fraud triangle: The fraud triangle consists of three elements—opportunity, pressure, and rationalization—which are factors that contribute to fraudulent behavior.
Examine the role of internal controls: Internal controls are processes and procedures implemented by organizations to prevent and detect fraud effectively.
Analyze the statement about fraud in small businesses: Fraud is not limited to large corporations; it can also occur in small businesses due to weaker internal controls or oversight.
Identify the incorrect statement: Compare each statement to the established concepts of fraud and determine which one contradicts the general understanding of fraud.
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