Multiple Choice
Organizations often worry that merit pay increases may lead to which of the following?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which of the following is NOT an example of a fraudulent crime?
A
Embezzlement
B
Shoplifting
C
Financial statement falsification
D
Insider trading
Verified step by step guidance1
Understand the concept of fraudulent crimes: Fraudulent crimes involve intentional deception or misrepresentation to gain an unfair advantage, often financial. Examples include embezzlement, financial statement falsification, and insider trading.
Analyze each option: Embezzlement involves misappropriating funds entrusted to someone, which is a fraudulent crime. Financial statement falsification involves manipulating financial records to mislead stakeholders, also a fraudulent crime. Insider trading involves using non-public information for financial gain, which is illegal and considered fraudulent.
Consider the nature of shoplifting: Shoplifting is the act of stealing goods from a store without paying. While it is a crime, it does not involve deception or misrepresentation, which are key elements of fraudulent crimes.
Compare shoplifting to the other options: Unlike embezzlement, financial statement falsification, and insider trading, shoplifting does not involve fraud or deceit. It is a straightforward theft crime.
Conclude that shoplifting is NOT an example of a fraudulent crime, as it lacks the element of intentional deception or misrepresentation.
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