Question

In: Accounting

1. Which is not one of the fraud factors in the fraud pentagon? Pressure Incentive Opportunity...

1. Which is not one of the fraud factors in the fraud pentagon?

Pressure

Incentive

Opportunity

Employee disenfranchisement

2. Which is an area where many round numbers would be expected?

Inventory accounts

Regulatory filings

Gross salary payments

None of the above

Solutions

Expert Solution

Answer:

1. Employee disenfranchisement

2. None of the above

Explanation:

1.

Pentagon concept explains the factors that cause someone to commit fraud. Factors in the fraud pentagon are as follows:

> Pressure

> Incentive / Opportunity

> Rationalization

> Capability

> Arrogance

So the odd one out is option 4 : Employee disenfranchisement.

2.

An analysis of round number transactions is a must to complete a proper audit. The round numbers tend to be around transactions like purchase of services or supplies with unique features, donation or charity, second hand assets etc. Numbers tend to be precise in case of areas where there is calculation in existence. Some of them are tax calculation, max produced inventories, employee benefit expenses etc.

Options given above including Gross salary payments, Regulatory filings, Inventory accounts belong to the latter category where numbers would be precise. Therefore, the answer is Option 4: None of the above.


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