Question 1

"I didn't steal the money,I only borrowed it until I can pay it back" is an example of:

Accepted Answer

This statement is an example of rationalization, as the person is trying to justify their actions by suggesting that they did not steal the money, but rather borrowed it with the intention of paying it back. This is a common tactic used by individuals who commit fraud or theft to avoid taking responsibility for their actions.

Question 2

Attempting to justify your actions is an example of:

Accepted Answer

Rationalization is the process of attempting to justify or explain one's actions, often in a way that makes them seem more acceptable or understandable.

Question 3

Finding good reasons for doing things that we REALLY know are wrong is an example of:

Accepted Answer

Rationalization refers to the cognitive process of finding a reason or justification for doing something that is morally or ethically questionable. It allows individuals to deceive themselves into thinking that their actions are acceptable or justified, despite evidence to the contrary.

Question 4

Larry is concerned that the company won't meet expected earnings,so he overstates revenues,telling himself "it's for a good reason!" This is an example of,respectively:

Accepted Answer

Larry's concern about not meeting expected earnings represents perceived pressure, and his justification of overstating revenues "for a good reason" is an example of rationalization.

Question 5

Committing a fraud because of a gambling addiction is related to what part of the Fraud Triangle?

Accepted Answer

A gambling addiction can create a significant perceived pressure for an individual to commit fraud in order to continue their addiction. This pressure can push them to rationalize their actions as necessary to support their habit, but the initial motivation is the perceived pressure to maintain their addiction.

Question 6

Joe was overlooked for a promotion and decides to embezzle money because he feels like he deserved that raise.This is an example of,respectively:

Accepted Answer

Joe feels pressure because he was overlooked for a promotion (perceived pressure) and justifies his actions by believing he deserved the raise (rationalization).

Question 7

Committing a fraud because the employee feels that it will be easy to do is related to what part of the Fraud Triangle?

Accepted Answer

Perceived opportunity is one of the three elements of the Fraud Triangle, along with perceived pressure and rationalization. This element refers to the employee's belief that they can successfully commit the fraud without getting caught. Therefore, if an employee commits fraud because they believe it will be easy to do, this is related to the perceived opportunity element of the Fraud Triangle.

Question 8

Audits confirm the validity and reliability of accounting information.

Accepted Answer

Audits are conducted to ensure that the accounting information is accurate, complete, and free from material misstatement. The auditor expresses an opinion on the financial statements based on the assessment of the evidence obtained during the audit. This opinion provides assurance to the users of the financial statements that the information is reliable and can be used for decision-making.

Question 9

Committing a fraud because of easy access to a company's assets is an example of:

Accepted Answer

Perceived opportunity refers to the belief that one can get away with committing fraud because of easy access to company assets.

Question 10

If an employee has a low incentive to commit fraud,the employee does NOT have:

Accepted Answer

The answer of If an employee has a low incentive...

Question 11

Removing any of the components of the Fraud Triangle:

Accepted Answer

Removing any of the components of the Fraud Triangle, such as opportunity, rationalization, or pressure, makes it less likely that fraud will occur. By removing one of these components, it becomes more difficult for fraud to take place as there may no longer be a tempting opportunity, a rationalization or excuse to commit fraud, or pressure to engage in fraudulent behavior. Therefore, it decreases the likelihood of fraud occurring.

Question 12

Committing a fraud because the employee feels "I deserve a pay raise.The company owes this to me" is related to what part of the Fraud Triangle?

Accepted Answer

This statement reflects the rationalization aspect of the Fraud Triangle, where the employee creates a justification for their fraudulent behavior. They believe that their actions are justified because they feel that they deserve more compensation from the company.

Question 13

An employee believes that getting away with a fraud without being detected is unlikely.This best relates to which part of the Fraud Triangle?

Accepted Answer

Perceived opportunity refers to the belief that one can commit fraud without being caught. If an employee thinks getting away with fraud is unlikely, it indicates a low perceived opportunity.

Question 14

The factor that might make a person steal money because "The company has more than its fair share," would be:

Accepted Answer

Rationalization is the factor that might make a person steal money because it involves justifying the theft by coming up with a reason or excuse, such as believing that the company has more money than it needs or deserves. The other options are not relevant to this specific motivation for stealing money.

Question 15

Committing a fraud because of a drug habit or living beyond your means is an example of:

Accepted Answer

Perceived pressure refers to the pressure an individual feels to commit fraud due to financial difficulties or other external factors, such as a drug habit or living beyond one's means.

Question 16

Brian is stealing money because the cash registers are not always locked away at night.This is an example of:

Accepted Answer

Brian's stealing behavior is driven by the perceived opportunity to do so because the cash registers are not always locked away at night. The other options do not fit the scenario. Realization usually refers to discovering something that was previously unknown, while rationalization is the act of justifying one's behavior to oneself or others. Perceived pressure typically involves external factors that influence one's behavior.

Question 17

________ can be reduced through a good system of internal control.

Accepted Answer

The answer of ________ can be reduced through a good...

Question 18

The factor that would make a person feel forced to steal money because of high medical bills would be:

Accepted Answer

Perceived pressure, such as feeling forced to pay high medical bills, can lead someone to make the unethical decision to steal money. This pressure could come from a sense of financial desperation, lack of options for payment plans, or fear of the consequences of not paying the bills.

Question 19

An employee's moral beliefs make it impossible to commit a fraud.This best relates to which part of the Fraud Triangle?

Accepted Answer

Rationalization refers to the mindset or moral beliefs that allow an individual to justify or excuse fraudulent behavior. If an employee's moral beliefs prevent them from committing fraud, it relates to the rationalization component of the Fraud Triangle.

Question 20

As it relates to accounting fraud,which of the following BEST describes "perceived pressure"?

Accepted Answer

Perceived pressure is an element of the fraud triangle that refers to the financial or personal pressures that an employee feels, leading them to commit fraud in order to obtain cash or other assets. These pressures may include personal financial difficulties, high levels of debt or living beyond their means, or pressure from senior management to achieve certain financial targets.

Quiz 6: The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics