Table of contents

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 Fraud Triangle, which of the following is most likely to increase the risk of fraud after your facility received a very negative complaint?

Implementation of stronger internal controls

Recognition of employees for their honesty

Providing additional training on ethical behavior

Increased pressure on employees to improve performance quickly

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Verified step by step guidance

Understand the Fraud Triangle, which consists of three elements: pressure, opportunity, and rationalization. These elements explain the conditions under which fraud is likely to occur.

Analyze the scenario: A very negative complaint has been received, which may create pressure on employees to improve performance quickly. This aligns with the 'pressure' element of the Fraud Triangle.

Evaluate the options provided: Implementation of stronger internal controls reduces opportunities for fraud, recognition of employees for honesty addresses rationalization, and providing additional training on ethical behavior promotes ethical decision-making but does not directly address pressure.

Identify the correct answer: Increased pressure on employees to improve performance quickly directly corresponds to the 'pressure' element of the Fraud Triangle, making it the most likely factor to increase the risk of fraud in this scenario.

Conclude that understanding the Fraud Triangle helps in identifying the root causes of fraud risk and implementing appropriate measures to mitigate them.