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 actions best helps a company minimize the risk of fraud, according to the Fraud Triangle framework?

Implement strong internal controls to reduce opportunities for fraud.

Encourage employees to keep concerns about fraud confidential.

Rely solely on external audits to detect fraud.

Increase employee workloads to discourage idle time.

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Verified step by step guidance

Understand the Fraud Triangle framework, which consists of three elements: opportunity, pressure, and rationalization. Fraud is more likely to occur when these three elements are present.

Recognize that minimizing opportunities for fraud is a key strategy in reducing the risk of fraudulent activities within a company.

Learn that implementing strong internal controls, such as segregation of duties, regular reconciliations, and access restrictions, directly addresses the 'opportunity' element of the Fraud Triangle.

Evaluate why relying solely on external audits is insufficient, as audits are periodic and may not catch all instances of fraud. Similarly, increasing workloads or encouraging confidentiality does not effectively address the root causes of fraud.

Conclude that the best action to minimize fraud risk is to implement strong internal controls, as this reduces opportunities for fraud and aligns with the Fraud Triangle framework.