Multiple Choice
Those damages awarded by the court to punish the defendant are called:
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which element of the fraud triangle is most directly associated with an employee rationalizing the misuse of company funds to purchase personal insurance policies with cash value?
A
Pressure
B
Opportunity
C
Collusion
D
Rationalization
Verified step by step guidance1
Understand the fraud triangle, which consists of three elements: Pressure, Opportunity, and Rationalization. These elements explain why individuals commit fraud.
Recognize that 'Pressure' refers to personal or financial stress that motivates someone to commit fraud, such as debt or financial hardship.
Understand that 'Opportunity' refers to the ability to commit fraud due to weak internal controls or lack of oversight within the organization.
Learn that 'Rationalization' is the process by which an individual justifies unethical behavior, convincing themselves that their actions are acceptable or necessary.
In this case, the employee rationalizes the misuse of company funds by convincing themselves that purchasing personal insurance policies with cash value is justified. This aligns most directly with the 'Rationalization' element of the fraud triangle.
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