Multiple Choice
Which of the following is at the core of most business failures?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following statements is NOT true about fraud?
A
Fraud can result in financial loss for organizations.
B
Fraud can occur even if there is no opportunity to commit it.
C
Fraud always involves intentional deception for personal gain.
D
The fraud triangle consists of pressure, opportunity, and rationalization.
Verified step by step guidance1
Understand the concept of fraud in financial accounting: Fraud refers to intentional deception or misrepresentation made by an individual or entity for personal gain or to damage another party.
Review the fraud triangle: The fraud triangle consists of three elements—pressure, opportunity, and rationalization. These elements explain the conditions under which fraud is likely to occur.
Analyze the statement 'Fraud can occur even if there is no opportunity to commit it': This contradicts the fraud triangle, which emphasizes that opportunity is a necessary condition for fraud to occur.
Compare the other statements: Ensure that the other statements align with the definition and characteristics of fraud, such as financial loss for organizations and intentional deception for personal gain.
Conclude which statement is NOT true based on the analysis: The statement 'Fraud can occur even if there is no opportunity to commit it' is inconsistent with the fraud triangle and is therefore not true.
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