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

If you make an illegal sale and did not meet a certain level of care, which element of the fraud triangle does this most directly relate to?

Collusion

Opportunity

Rationalization

Pressure

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Verified step by step guidance

Understand the fraud triangle, which consists of three elements: Opportunity, Pressure, and Rationalization. These elements explain the factors that lead to fraudulent behavior.

Opportunity refers to the ability to commit fraud due to weak internal controls or lack of oversight. This is the most direct element when someone makes an illegal sale without meeting a certain level of care.

Pressure refers to external or internal forces that compel someone to commit fraud, such as financial difficulties or unrealistic performance expectations.

Rationalization involves the mindset or justification that allows the individual to believe their fraudulent actions are acceptable or necessary.

In this scenario, the lack of care in making an illegal sale aligns most directly with the Opportunity element, as it reflects a situation where controls or oversight are insufficient to prevent fraudulent behavior.