Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Chapter 2, Problem 5TF
To determine
The following statement as true or false – Fraud-fighters invest their time and effort to minimize the pressure component of the fraud triangle
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Understanding what constitutes fraud and understanding the framework are a part of developing an internal control program. The fraud triangle is a framework that is used to understand and explain what the motivation could be when a person decides to commit fraud.
Thinking about the fraud cases that you are aware of, how would the fraud triangle explain fraudulent behavior?
If one of the three elements of the fraud triangle is not present, can fraud still be perpetrated? Explain.
Identify factors (red flags) that would be strong indicators of opportunities to commit fraud.
Is the ability to rationalize the fraud an important aspect to consider when analyzing a potentially fraudulent situation? What are some of the common rationalizations used by fraud perpetrators?
Define and illustrate kiting. What controls should the client institute to prevent it?
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Chapter 2 Solutions
Fraud Examination
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - What are some different types of pressures?Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQ
Ch. 2 - Prob. 12DQCh. 2 - Prob. 1TFCh. 2 - Prob. 2TFCh. 2 - Management's example or modeling is of little...Ch. 2 - Prob. 4TFCh. 2 - Prob. 5TFCh. 2 - Prob. 6TFCh. 2 - Prob. 7TFCh. 2 - Prob. 8TFCh. 2 - Prob. 9TFCh. 2 - Prob. 10TFCh. 2 - Prob. 11TFCh. 2 - Prob. 12TFCh. 2 - Prob. 13TFCh. 2 - Prob. 14TFCh. 2 - Prob. 15TFCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQCh. 2 - Prob. 8MCQCh. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Prob. 11MCQCh. 2 - Prob. 12MCQCh. 2 - Prob. 13MCQCh. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Prob. 16MCQCh. 2 - Prob. 17MCQCh. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - Prob. 20MCQCh. 2 - Prob. 1SCCh. 2 - Case 2
A few years ago, there was a large oil...Ch. 2 - Prob. 3SCCh. 2 - Prob. 4SCCh. 2 - Prob. 5SCCh. 2 - Prob. 6SCCh. 2 - Prob. 7SCCh. 2 - Prob. 8SCCh. 2 - Prob. 9SCCh. 2 - Prob. 10SCCh. 2 - Case 11
As a new staff member in a large national...Ch. 2 - Prob. 12SCCh. 2 - Prob. 13SCCh. 2 - Prob. 14SCCh. 2 - Case 15 But I intended to pay it all back, I...Ch. 2 - Prob. 1.1CSCh. 2 - Prob. 1.2CSCh. 2 - Prob. 1.3CSCh. 2 - Prob. 2.1CSCh. 2 - Prob. 2.2CSCh. 2 - Prob. 2.3CSCh. 2 - 1. What factors in Johnson’s control environment...Ch. 2 - Prob. 3.2CSCh. 2 - Prob. 3.3CSCh. 2 - How did trust contribute to Mr. Armstrongs fraud?Ch. 2 - Prob. 4.2CSCh. 2 - Prob. 5.1CSCh. 2 - Prob. 5.3CSCh. 2 - Prob. 5.4CS
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- Whistle-blowers have played a key role in fraud detection. There are several types of whistle-blowers and safeguards for each type. Analyze the adversities that whistle-blowers face, including the safeguards intended to protect them. Compare the different types of whistle-blowers. What is the importance of each type?arrow_forwardWhich is NOT a source of fraud risk (from the Fraud Triangle)? a) Fraud Tip Hotline b) Perceived Opportunity c) Rationalization d) Financial Pressurearrow_forwardOpportunity, Financial Pressure, and Rationalization are the three main factors contribute to fraud activity. In your view, discuss the factor that you believe is the most crucial to creating a fraud. Provide examples to support your conclusion and defend your choice in the discussion.arrow_forward
- Explain the three special characteristics of management fraud: a. The fraud is perpetrated at levels of management above the one to which internal control structures generally relate. b. The fraud frequently involves using the financial statements to create an illusion that an entity is healthier and more prosperous than, in fact, it is. c. If the fraud involves misappropriation of assets, it frequently is shrouded in a maze of complex business transactions, often involving related third parties. Please provide me a correct and clear explanations. Thank you!arrow_forwardWhat is a good response to.... Embezzlement is a type of fraud that happens when someone within an organization misuses their position of trust to steal money. This breach of trust is an intentional form of deceit to misappropriately utilize these funds for their own gain. Reviewing sales, refunds, returns, cash deposits, and voided transactions would help identify any form of fraud as an assistant manager. If there are any discrepancies identified, it would help to review logs of who accessed software at specific times to help identify the culprit. If there was something identified the next step would be to reports the findings to higher management depending on company protocol and be a confidant during the investigation process. It is not advisable to have direct confrontation as it could lead to further deceitful actions with the intent to cover up their actions.arrow_forward“Organizations are encouraged to take every precaution possible to protect their information systems so that potential for fraud and any resulting losses can be significantly minimized.” Required: Critically explain any three motives behind the cheque fraud scheme. What to do if someone has deposited a fake cheque into your bank account?arrow_forward
- The fraud triangle asserts that the following three factors must exist for a person to commit fraud.A. Opportunity B. Pressure C. RationalizationIdentify the fraud risk factor (A, B, or C) in each of the following situations. Officers are told to show rising income or risk layoffs.arrow_forwardAccounts payable fraud is an issue that may arise. Find an Accounts payable fraud story on the internet Discuss the following: What was the purpose of the fraud? What were the actions and consequences? Who benefitted from the fraud? How did the fraud get discovered? What controls should have been in place to prevent fraud?arrow_forwardResearch fraud cases that involved agency conflicts. Provide the following: Overview of the organization Who was involved? How was the fraud committed? What was the outcome? What recommendations do you have to stop such a fraud relating to this conflict of interest?arrow_forward
- FRAUD-MOTIVATING FACTORSResearch has shown that situational pressures and opportunity are factors that contribute to fraudulent behavior. Requireda. Identify two situational pressures in a public company that would increase the likelihood of fraud.b. Identify three opportune moments that would increase the likelihood of fraud.arrow_forwardSelect the correct answer(s) for the following multiple choice questions. Note that there may be more than one correct answer. In a typical misappropriation, the perpetrator: Gains the trust or confidence of the entity being defrauded. Uses trickery, cunning, or false or misleading information to commit fraud. Does not make an attempts to conceal the fraud. Terminates the fraud as soon as the desired amount of money is taken to avoid detection. Saves a large portion of the stolen money. Gets greedy and takes ever-larger amounts of money or grows careless or overconfident, leading to a mistake that leads to the fraud’s detection.arrow_forwardThe following scenarios are taken from actual fraud cases. For each scenario, categorize as primarily indicating (A) An incentive to commit fraud (B) An opportunity to commit fraud or (C) a rationalization for committing fraud. State your reason for your answer in each scenario. 1. Top management of the company closely guards internal financial information, to the extent that even some employees on a "need to know basis" are denied full access.arrow_forward
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