The Fraud Triangle Has Three Components

question 43

Multiple Choice

The fraud triangle has three components. Which of the components must be present for a fraud to occur?

• A) All factors must be present for fraud to occur.
• B) All factors need not be present.
• C) Fraud can occur if any one of the factors is present.
• D) None of the above

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Definitions:

Rights Of Owners

Entitlements or privileges that come with owning equity or shares in a corporation, including voting rights, dividends, and the right to share in the assets of the company during liquidation.

Owner's Rights

The legal entitlements or claims a person has over an asset or property, reflecting one's ownership and the benefits and responsibilities that come with it.

Creditors' Rights

The legal entitlements and protections afforded to lenders or creditors to ensure repayment of debt or loans.

External Users

Individuals or entities outside a company who have an interest in the company's financial information, such as investors and creditors.