Multiple Choice
Which of the following transactions has the most risk of fraud according to the Fraud Triangle?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which of the following are major drivers of unethical strategies and business behavior according to the Fraud Triangle?
A
Pressure, Opportunity, and Rationalization
B
Profit, Competition, and Regulation
C
Assets, Liabilities, and Equity
D
Leadership, Communication, and Training
Verified step by step guidance1
Understand the Fraud Triangle concept, which is a framework used to explain the factors that lead to unethical behavior in business. The three components are Pressure, Opportunity, and Rationalization.
Pressure refers to the motivation or incentive that drives an individual to commit fraud, such as financial difficulties or unrealistic performance expectations.
Opportunity arises when there is a lack of controls or oversight, allowing individuals to exploit weaknesses in the system to commit unethical acts.
Rationalization is the process by which individuals justify their unethical behavior, convincing themselves that their actions are acceptable or necessary.
Compare the given options to the components of the Fraud Triangle. The correct answer is the option that includes Pressure, Opportunity, and Rationalization.
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