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 of the following is a potential cost of avoiding insurance in the context of fraud risk management?

Reduced need for internal controls

Increased financial vulnerability to unexpected losses

Lower risk of fraud occurring

Guaranteed reimbursement for all losses

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Verified step by step guidance

Understand the context of fraud risk management and the role of insurance in mitigating financial risks.

Recognize that avoiding insurance can lead to increased financial vulnerability because unexpected losses would not be covered, leaving the organization exposed to significant financial risks.

Evaluate the incorrect options: 'Reduced need for internal controls' is not a cost of avoiding insurance, as internal controls are necessary regardless of insurance status. 'Lower risk of fraud occurring' is unrelated to insurance avoidance, and 'Guaranteed reimbursement for all losses' is a benefit of having insurance, not avoiding it.

Identify the correct answer: 'Increased financial vulnerability to unexpected losses' is the potential cost of avoiding insurance, as it directly relates to the lack of coverage for unforeseen events.

Conclude that insurance plays a critical role in fraud risk management by providing financial protection against unexpected losses, and avoiding it increases the organization's exposure to financial risks.