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, when are directors, managers, and employees most likely to engage in unethical behavior?

When the company has a strict code of ethics and transparent reporting

When they receive regular performance bonuses and recognition

When they experience pressure, have an opportunity, and can rationalize their actions

When internal controls are strong and regularly monitored

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Verified step by step guidance

Understand the concept of the fraud triangle, which consists of three elements: pressure, opportunity, and rationalization. These elements explain the conditions under which unethical behavior is most likely to occur.

Pressure refers to financial or personal stress that motivates individuals to commit fraud, such as debt, unrealistic performance targets, or personal financial difficulties.

Opportunity arises when there are weaknesses in internal controls or oversight, allowing individuals to exploit gaps in the system without being detected.

Rationalization is the process by which individuals justify their unethical actions, convincing themselves that their behavior is acceptable or necessary under the circumstances.

Combine these three elements to recognize that directors, managers, and employees are most likely to engage in unethical behavior when they experience pressure, have an opportunity to act without detection, and can rationalize their actions.