🧾 (CH5) ACC EXAM 2

The fraud triangle contains three elements that must exist for accounting fraud to occur. The elements are

incentive, opportunity, and rationalization

Which element is part of the fraud triangle?

Incentive

A strong system of internal ___ reduces the ___ to commit fraud.

controls; opportunity

The main purposes of internal controls include all of the following except

providing more favorable financial information

Protecting against theft of assets and enhancing accounting information is the objective

internal controls

Which of the following is not a reason that a business needs an effective internal control system?

Identify ways to evade applicable laws and regulations

Which of the following was passed by Congress in response to financial statement frauds that occurred in the early 2000s?

Sarbanes-Oxley Act

Cashiers at a supermarket must talk to a manager before approving price changes at the register. Which internal control principle is being followed?

Segregate duties

The control environment

is the attitude that people in the organization hold regarding internal control

Which of the following is not one of the control components that are part of the framework used when analyzing an internal control system?

independent verifications

Employee fraud includes which of the following categories?

Corruption

Which of the following is not a category of employee fraud?

Internal controls