BUS 210 Chapter 7 HW - Chapter 7 HW Questions 1 A fraud is...

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Chapter 7 HW Questions 1. A fraud is a dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. An example of a bank fraud is embezzling money from the bank over a period of time. 2. The three factors are opportunity, financial pressure and rationalization. Fraud can be committed if the workplace provides an opportunity for the employee to exploit. Employees may be tempted to commit fraud if they are financially unstable or are in debt. To be able to commit fraud and live with it, the employees are rationalizing their actions by convincing themselves that what they are doing is legal. 3. The five components of a good internal control are a control environment, risk assessment, control activities, information and communication, and monitoring. A control environment is often referred to as the “tone at the top” and establishes that unethical activity will not be tolerated. Companies must identify and analyze the factors that create risk and learn how to manage these risks. The company must design policies and procedures to address the risk it
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