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IQ #1 - The risk that an organization might be victimized by an individual who is able to overcome the three elements of the fraud triangle is called _______________.
  1. Insider risk
  2. Environmental risk
  3. Fraud risk
  4. Audit risk
View Answer
Cressey’s fraud triangle teaches us that there are three interrelated elements that enable someone to commit fraud: the motive that drives a person to want to commit the fraud, the opportunity that enables him to commit the fraud, and the ability to rationalize the fraudulent behavior. The vulnerability that an organization has to those capable of overcoming all three elements of the fraud triangle is fraud risk. Fraud risk can come from sources both internal and external to the organization. Correct Answer: (C)

IQ #2 - According to COSO, _________ is a process that is designed to identify potential events that may affect the entity and manage risk to be within its risk appetite in order to provide reasonable assurance regarding the achievement of the entity’s objectives.
  1. Corporate governance
  2. Fraud prevention
  3. Enterprise risk management
  4. Internal control
View Answer
Fraud risk assessment is a process aimed at proactively identifying and addressing an organization’s vulnerabilities to internal and external fraud. A fraud risk assessment starts with an identification and prioritization of fraud risks that exist in the business. The process evolves as the results of that identification and prioritization begin to drive education, communication, organizational alignment, and action around effectively managing fraud risk and identifying new fraud risks as they emerge. Correct Answer: (C)

IQ #3 - During a fraud risk assessment, the assessment team should consider the way employees make decisions, behave, or treat others and assess how those actions affect the company's vulnerability to fraud.
  1. True
  2. False
View Answer
The actions of certain individuals can significantly increase the company's vulnerability to fraud. The risk can be driven from the way in which someone makes decisions, behaves, or treats others within and outside the organization. A fraud risk assessment can help home in on those people and their activities that might increase the company's overall fraud risk. Correct Answer: (A)

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IQ #1 - The risk that an organization might be victimized by an individual who is able to overcome the three elements of the fraud triangle is called _______________.

  1. Insider risk
  2. Environmental risk
  3. Fraud risk
  4. Audit risk
Cressey’s fraud triangle teaches us that there are three interrelated elements that enable someone to commit fraud: the motive that drives a person to want to commit the fraud, the opportunity that enables him to commit the fraud, and the ability to rationalize the fraudulent behavior. The vulnerability that an organization has to those capable of overcoming all three elements of the fraud triangle is fraud risk. Fraud risk can come from sources both internal and external to the organization. Correct Answer: (C)

IQ #2 - According to COSO, _________ is a process that is designed to identify potential events that may affect the entity and manage risk to be within its risk appetite in order to provide reasonable assurance regarding the achievement of the entity’s objectives.

  1. Corporate governance
  2. Fraud prevention
  3. Enterprise risk management
  4. Internal control
Fraud risk assessment is a process aimed at proactively identifying and addressing an organization’s vulnerabilities to internal and external fraud. A fraud risk assessment starts with an identification and prioritization of fraud risks that exist in the business. The process evolves as the results of that identification and prioritization begin to drive education, communication, organizational alignment, and action around effectively managing fraud risk and identifying new fraud risks as they emerge. Correct Answer: (C)

IQ #3 - During a fraud risk assessment, the assessment team should consider the way employees make decisions, behave, or treat others and assess how those actions affect the company's vulnerability to fraud.
  1. True
  2. False
The actions of certain individuals can significantly increase the company's vulnerability to fraud. The risk can be driven from the way in which someone makes decisions, behaves, or treats others within and outside the organization. A fraud risk assessment can help home in on those people and their activities that might increase the company's overall fraud risk. Correct Answer: (A)