Multiple Choice
Which of the following is an example of how ethics shapes business laws in the context of fraud prevention?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which term describes an action that can damage or compromise an asset?
A
Opportunity
B
Threat
C
Incentive
D
Rationalization
Verified step by step guidance1
Understand the context of the question: In Financial Accounting, terms like 'Threat,' 'Opportunity,' 'Incentive,' and 'Rationalization' are often used in risk assessment and fraud analysis.
Define the term 'Threat': A threat refers to any action, event, or condition that has the potential to damage or compromise an asset, whether it is physical, financial, or informational.
Differentiate the other terms: 'Opportunity' refers to a favorable condition for achieving a goal, 'Incentive' is a motivating factor, and 'Rationalization' is the justification of unethical behavior.
Relate the term 'Threat' to asset protection: In accounting, threats are identified during risk assessments to ensure proper controls are in place to safeguard assets.
Conclude that the correct term describing an action that can damage or compromise an asset is 'Threat,' as it directly aligns with the definition provided.
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