Multiple Choice
Which of the following would be considered unethical in a business setting according to the principles of the fraud triangle?
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6. Internal Controls and Reporting Cash
Fraud and the Fraud Triangle
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Which of the following can be a threat to operational financing according to the fraud triangle?
A
Pressure to meet financial targets
B
Transparent financial reporting
C
Effective segregation of duties
D
Strong internal controls
Verified step by step guidance1
Understand the fraud triangle: The fraud triangle consists of three elements that contribute to fraudulent behavior—pressure, opportunity, and rationalization.
Analyze the options provided in the question: Evaluate each option to determine if it aligns with the concept of 'pressure' in the fraud triangle.
Option 1: 'Pressure to meet financial targets'—This represents a direct example of pressure, as individuals may feel compelled to manipulate financial data to achieve targets.
Option 2: 'Transparent financial reporting'—This is a preventive measure that reduces the opportunity for fraud, not a source of pressure.
Option 3 and 4: 'Effective segregation of duties' and 'Strong internal controls'—Both are mechanisms to reduce opportunities for fraud, not sources of pressure.
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