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

Which method is commonly used to consider alternate ways of conducting business in order to manage risk, as related to the Fraud Triangle?

Segregation of duties

Authorization controls

Risk assessment

Reconciliation

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Verified step by step guidance

Understand the Fraud Triangle: The Fraud Triangle consists of three elements that contribute to fraudulent behavior—opportunity, pressure, and rationalization. Managing risk involves addressing these elements to reduce the likelihood of fraud.

Recognize the role of risk assessment: Risk assessment is a systematic process used to identify, analyze, and evaluate potential risks that could impact an organization. It helps in identifying vulnerabilities related to the Fraud Triangle and implementing measures to mitigate them.

Compare risk assessment with other methods: Segregation of duties, authorization controls, and reconciliation are specific internal controls designed to reduce opportunities for fraud. However, risk assessment is broader and focuses on evaluating all possible risks, including those related to the Fraud Triangle.

Understand why risk assessment is the correct answer: Risk assessment considers alternate ways of conducting business by identifying and addressing risks holistically. It is a proactive approach to managing risk, whereas the other methods are reactive controls implemented after risks are identified.

Apply the concept: To manage risk effectively, organizations should conduct regular risk assessments, identify areas of vulnerability, and implement appropriate controls (such as segregation of duties, authorization controls, and reconciliation) to address the risks identified.