CS Professional · Internal and Forensic Audit · Basic Concepts of Forensic Audit
At Kaveri Textiles Ltd, the purchase manager, Mr. Rao, is under heavy personal debt from gambling and believes his employer will never notice small diversions of funds. In the fraud triangle, the personal financial pressure that pushes him towards fraud is best described as which element?
Personal financial need such as gambling debt is the pressure or motive element of the fraud triangle. It gives the person the incentive to commit fraud. Opportunity relates to weak controls, and rationalisation relates to the mental justification the person uses to excuse the act.
- AOpportunity
- BPressure (motive)Correct
- CRationalisation
- DCapability
Explanation
The fraud triangle has three elements: pressure (incentive or motive), opportunity and rationalisation. Personal debt is a financial need that drives the person to act, so it is pressure. Opportunity would be weak controls allowing the act, and rationalisation is the self-justification.
Did you get it right without looking?
One question tells you little. A timed set on Basic Concepts of Forensic Audit shows your real accuracy, how long you take and where you lose marks.
More Basic Concepts of Forensic Audit questions
- A forensic auditor at Narmada Foods Ltd finds that a senior executive, Mr. Shah, accepted gifts and cash from a supplier in return for award…
- Kaveri Pharma's internal audit department reports to the audit committee and reviews controls across procurement each quarter, with no speci…
- Rohan, a forensic auditor, is engaged by Bharat Foods Ltd. Midway, he finds that the promoter's relative is involved and the promoter asks h…
- Sundaram Textiles Ltd. notices that its purchase ledger shows unusually high payments to a single vendor. The board appoints an independent …
- During a forensic review of Kaveri Agro Pvt Ltd, the auditor copies the accounting server's data, records who handled the copy and when, and…
- While examining the accounts payable ledger of Kaveri Engineering Pvt Ltd, a forensic auditor runs a test that compares the frequency of lea…