Multiple Choice
Which element of the fraud triangle is most directly addressed by implementing software to detect fraud in consumer phone cards?
115
views
6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
Multiple Choice
All of the following transactions might indicate a money laundering red flag except:
A
A customer frequently deposits large amounts of cash just below the reporting threshold.
B
A company regularly pays its utility bills through its operating account.
C
An account shows sudden, unexplained increases in wire transfers.
D
A business makes payments to unrelated third parties in high-risk countries.
Verified step by step guidance1
Understand the concept of money laundering red flags: Money laundering involves disguising the origins of illegally obtained money, and certain financial transactions can indicate suspicious activity.
Review each transaction option provided in the problem and assess whether it aligns with common money laundering red flags. For example, frequent deposits just below the reporting threshold may indicate an attempt to avoid detection.
Analyze the transaction where a company regularly pays its utility bills through its operating account. This is a normal business activity and does not typically indicate suspicious behavior, making it the exception.
Evaluate the other transactions, such as sudden increases in wire transfers or payments to unrelated third parties in high-risk countries, as these could be indicative of money laundering activities.
Conclude that the transaction involving regular utility bill payments is the least likely to be a money laundering red flag, as it represents standard business operations.
Related Videos
Related Practice
