The First Step to Detecting Fraud Is To

question 31

Multiple Choice

The first step to detecting fraud is to:

• A) build an internal control system.
• B) establish an audit committee and identify its authority.
• C) seek out red flag transactions and possible anomalies.
• D) build an understanding of the organization and the environment in which it operates.

---

Definitions:

Rate of Crime

The frequency or number of criminal acts within a specific time frame or geographical area.

Differential Association Theory

A theory proposed by Edwin H. Sutherland positing that criminal behavior is learned through social interactions with others.

Deviant Contacts

Associations or interactions with individuals or groups considered deviant by societal standards.

Violation of the Law

An act or behavior that goes against the established legal rules and regulations.