4.1 Learning Objective 4-1
1) One of the elements of the fraud triangle is opportunity.
2) Perpetrators of fraud usually commit fraud for their own short-term economic gain.
3) Fraud is a major problem in many businesses throughout the world.
4) One of the most common types of fraud that impacts the financial statements is the misappropriation of assets.
5) An environment with strong internal controls can be circumvented with collusion.
6) The type of fraud committed by company managers who make false and misleading entries in the books in order to improve a company's financial statements is called:
A) misappropriation of assets.
B) fraudulent financial reporting.
C) embezzlement.
D) collusion.
7) The type of fraud committed by employees of an entity who steal money from the company and cover it up through erroneous entries in the books is called:
A) misappropriation of assets.
B) fraudulent financial reporting.
C) phishing.
D) collusion.
8) The two most common types of fraud impacting the financial statements are:
A) fraudulent financial reporting and e-commerce fraud.
B) misappropriation of assets and embezzlement.
C) fraudulent financial reporting and misappropriation of assets.
D) cooking the books and fraudulent financial reporting.
9) ________ is the most common fraud, but ________ is the most expensive fraud.
A) Fraudulent financial reporting, misappropriation of assets
B) Misappropriation of assets, fraudulent financial reporting
C) Misappropriation of assets, cooking the books
D) Cooking the books, misappropriation of assets
10) ________ is the element in the fraud triangle that results from weak internal controls.
A) Motive
B) Opportunity
C) Rationalization
D) Reasoning