L3 Notes_Part_2 - •Vices •Other(spousal perfect crime...

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© W.R. Knechel Components of Fraud Triangle Opportunity: - Monitoring: Absence of or improper oversight by B. of D. or audit committee, weak internal and external audit functions and weak internal controls and technology control - Unusual or complex transactions - Inability to judge quality, subjectivity in estimates for valuation - Cash and inventory susceptible to theft readily available - Failure to discipline fraud perpetrators
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Components of Fraud Triangle Perceived Pressure - Motive •Financial pressures, greed •Work related pressures •Desperate family need
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Unformatted text preview: •Vices •Other (spousal, perfect crime) © W.R. Knechel Components of Fraud Triangle Rationalization -Hospital bills for children -Can’t pay second mortgage or service credit card debt, don’t want to lose house and uproot kids from school -Bonus, promotion, sales commission or raise didn’t come through -Messy divorce and assets are tied up -Money invested in bar, running losses and need the money temporarily to keep business afloat (a loan) -Ethical code and internal control rules set by corporate leaders who flaunt rules...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L3 Notes_Part_2 - •Vices •Other(spousal perfect crime...

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