Discuss element of the fraud triangle

Discuss element of the fraud triangle
Which of the following is not an element of the fraud
triangle?
(a) Rationalization.
(b) Financial pressure.
(c) Segregation of duties.
(d) Opportunity.
2. An organization uses internal control to enhance the
accuracy and reliability of its accounting records and to:
(a) safeguard its assets.
(b) prevent fraud.
(c) produce correct financial statements.
(d) deter employee dishonesty.
3. Which of the following was not a result of the Sarbanes-
Oxley Act?
(a) Companies must file financial statements with
the Internal Revenue Service.
(b) All publicly traded companies must maintain
adequate internal controls.
(c) The Public Company Accounting Oversight Board
was created to establish auditing standards and
regulate auditor activity.
(d) Corporate executives and board of directors
must ensure that controls are reliable and effec-
tive, and they can be fined or imprisoned for fail-
ure to do so.
4. The principles of internal control do not include:
(a) establishment of responsibility.
(b) documentation procedures.
(c) management responsibility.
(d) independent internal verification.
5. Physical controls do not include:
(a) safes and vaults to store cash.
(b) independent bank reconciliations.
(LO 1)
(LO 1)
(LO 1)
(LO 2)
(LO 2)
Self-Test, Brief Exercises, Exercises, Problem Set A, and many more components are available
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356 7 Fraud, Internal Control, and Cash
(c) locked warehouses for inventories.
(d) bank safety deposit boxes for important pa-
pers.
6. Permitting only designated personnel to handle cash
receipts is an application of the principle of:
(a) segregation of duties.
(b) establishment of responsibility.
(c) independent check.
(d) human resource controls.
7. Which of the following control activities is not rele-
vant to when a company uses a computerized (rather
than manual) accounting system?
(a) Establishment of responsibility.
(b) Segregation of duties.
(c) Independent internal verification.
(d) All of these control activities are relevant to a
computerized system.
8. The use of prenumbered checks in disbursing cash is
an application of the principle of:
(a) establishment of responsibility.
(b) segregation of duties.
(c) physical controls.
(d) documentation procedures.
9. A company writes a check to replenish a $100 petty
cash fund when the fund contains receipts of $94
and $4 in cash. In recording the check, the company
should:
(a) debit Cash Over and Short for $2.
(b) debit Petty Cash for $94.
(c) credit Cash for $94.
(d) credit Petty Cash for $2.