Multiple Choice
Which of the following arrangements of duties could most likely lead to embezzlement or theft within an organization?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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In the context of fraud detection, some financial experts refer to which of the following as "death cards"?
A
Red flags that indicate potential fraudulent activity
B
Credit cards with expired dates
C
Bank statements with zero balances
D
Checks that have been voided
Verified step by step guidance1
Understand the term 'death cards' in the context of fraud detection. It refers to indicators or 'red flags' that suggest potential fraudulent activity.
Analyze the options provided in the question to determine which aligns with the concept of 'red flags' in fraud detection.
Option 1: 'Red flags that indicate potential fraudulent activity' directly matches the definition of 'death cards' as warning signs of fraud.
Option 2: 'Credit cards with expired dates' does not inherently indicate fraud, as expired cards are a normal occurrence in financial systems.
Option 3: 'Bank statements with zero balances' and Option 4: 'Checks that have been voided' are not typically considered 'red flags' for fraud. They may occur for legitimate reasons and do not directly align with the concept of 'death cards'.
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