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 an example of a detective control in the context of fraud prevention?

Implementing password protection for accounting systems

Requiring management approval for large transactions

Conducting regular bank reconciliations

Segregating duties among employees

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Verified step by step guidance

Understand the concept of detective controls: Detective controls are mechanisms designed to identify and uncover errors, irregularities, or fraud after they have occurred. They are not preventive but rather serve to detect issues.

Analyze the options provided: Each option represents a different type of control. For example, password protection is a preventive control, requiring management approval is a preventive control, and segregating duties is also a preventive control.

Focus on the correct answer: Conducting regular bank reconciliations is a detective control because it involves reviewing and comparing records (bank statements and accounting records) to identify discrepancies or unauthorized transactions.

Explain why bank reconciliations are detective: Regular bank reconciliations help detect errors, fraud, or unauthorized transactions by ensuring that the organization's financial records match the bank's records. This process uncovers issues that may have already occurred.

Conclude the reasoning: By understanding the nature of detective controls and analyzing the options, it is clear that conducting regular bank reconciliations is the correct example of a detective control in the context of fraud prevention.