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Problem-1
Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it.
- An employee’s monthly credit card payments are nearly 75% of their monthly earnings.
- An employee earns minimum wage at a firm that has reported record earnings for each of the last five years.
- An employee has an expensive gambling habit.
- An employee has check-writing and -signing responsibilities for a small company, and is also responsible for reconciling the bank account.
Problem-2
The internal control procedures in Dayton Company result in the following provisions. Identify the principles of internal control that are being followed in each case.
- Employees who have physical custody of assets do not have access to the accounting records. select a principle of internal control
- Each month, the assets on hand are compared to the accounting records by an internal auditor. select a principle of internal control
- A prenumbered shipping document is prepared for each shipment of goods to customers.