Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 7 - Fraud, Internal Control, and Cash - Questions: 2

Answer

(1) The three primary factors that contribute to fraudulent activity are as follows: Opportunity, Financial Pressure,Rationalization.

Work Step by Step

1) Opportunity - When the work place lacks sufficient controls to deter and detect frauds, it gives an Opportunity to the employee to commit a fraud. 2) Financial Pressure - Employees commit fraud because of personal financial problems or too much debt. 3) Rationalization- In order to justify their fraud employees rationalizes their dishonest actions.
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