Multiple Choice
Which element of the fraud triangle is most directly illustrated when an insurer neglects to pay a legitimate claim?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which of the following is NOT a result of unethical business finance practices?
A
Loss of stakeholder trust
B
Damage to company reputation
C
Increased investor confidence
D
Legal penalties and fines
Verified step by step guidance1
Understand the context of the question: The problem is asking which option is NOT a result of unethical business finance practices. This means we need to identify the option that does not align with the negative consequences typically associated with unethical behavior in finance.
Review the provided options: The options include 'Loss of stakeholder trust,' 'Damage to company reputation,' 'Increased investor confidence,' and 'Legal penalties and fines.'
Analyze the typical consequences of unethical business finance practices: Unethical practices often lead to negative outcomes such as loss of trust from stakeholders, harm to the company's reputation, and potential legal repercussions like fines or penalties.
Evaluate the option 'Increased investor confidence': This is a positive outcome and does not align with the negative consequences of unethical practices. Unethical behavior typically erodes investor confidence rather than increasing it.
Conclude that 'Increased investor confidence' is the correct answer because it is the only option that does not represent a negative consequence of unethical business finance practices.
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