Question

1) Give a definition of Fraud and what are three main factors that contribute to Fraudalent activity?

2) choose the correct answer:

1. Using prenumbered checks and having an approved invoice for each check is an example of
   1. establishment of responsibility.
   2. segregation of duties.
   3. documentation procedures.
   4. independent internal verification.

Answer 1

Give a definition of Fraud and what are three main factors that contribute to Fraudalent activity?

Fraud is a criminal deception to secure unfair or unlawful  and financial or personal gain,involves the false representation of facts.

There are three main factors that contribute to Fraudalent activity:

1. opportunity - When the workplace lacks sufficient controls to deter and detect fraud.

2. financial pressure - When the employee wants to lead a luxurious life but he cannot afford on his current salary.

3. rationalization - The employee is underpaid but company is making lot of profit.

Using prenumbered checks and having an approved invoice for each check is an example of

c. documentation procedures.