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Quiz 2 - Question 1 3 out of 3 points Explain the fraud...

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Question 1 3 out of 3 points Explain the fraud triangle. Answer Selected Answer: The fraud triangle consists of 3 parts. There is motive, opportunity and rationalization. There is always a motive behind what someone is doing whether it is wrong or right. The person may have a drinking problem or a drug problem and needs money. There are also financial issues that may be going on in a household and they figure getting money from their company is a better chance of stealing and not getting caught. Opportunity consists of maybe not getting caught for a longer amount of time. It won't happen right away but will happen eventually. This means that there is lack of internal control in the company. If an employee knows that there is lack of internal control this will stimulate someone to think they can get away with it easily. This may also lead to an employee believing that they just will not get caught. Lastly there is rationalization. Someone may think that they deserve to get a bonus or a raise and since they did not receive it from the company they believe they are entitled to this and just take it by embezzling. They consider this as being a loan and have belief that they will pay it back. When they realize the amount taken usually they are in way too deep to get themselves out. Correct Answer: The fraud triangle consists of three point and all these points need to be in place for fraud to occur. The first point is motive. The employee has a perceived non-sharable financial need. They cannot discuss this financial need with anyone out of fear of loss of status, either in a social situation or a business situation. The financial need comes from some sort of vice, drugs, gambling or the sort or just greed that led them to want more money. The second point is opportunity. The employee knows the system, the weaknesses they can use to hide the fraud, and believes they won't get caught. The third point is rationalization. The employee does not think they are committing a crime. They justify the fraud in their minds. As the fraud continues they become so involved they loose track of the amount taken and the fraud takes over their life. Response Feedback: [None Given] Question 2 2 out of 3 points
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Explain Albrecht's concept of the fraud scale. Answer Selected Answer: The fraud scale was designed to make people predict a potential fraud that is occuring. This contains problems with environment and usually debts/losses. There is also perceived opportunities that results in Poor controls and personal integrity which is the Individual code of behavior.
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