For Each Scenario Below, Indicate Which Element of the Fraud

question 21

Essay

For each scenario below, indicate which element of the fraud triangle is present.
(a) Large amounts of cash are on hand.
(b) Management failed to correct ICFR deficiencies in a timely manner.
(c) The organizational structure is complex and lines or authority are unclear.
(d) Future employee layoffs are expected.
(e) Employee behavior suggests dissatisfaction with the company.
(f) Restrictions on the auditor limit access to evidence.
(g) Management attempts to influence the scope of the audit work.
(h) Industry factors threaten the company's financial stability.
(i) Significant related party transactions are audited by another firm.
(j) The personal financial situation of management is threatened.

---

Definitions:

Initial Investment

The initial amount of money invested in a project, property, or business to start operations.

Required Rate

The minimum return an investor expects to achieve when investing in a project or security.

Annuity

A financial product that provides a series of payments at fixed intervals, often used for retirement savings or income generation.

Net Present Value

A financial metric that calculates the value of a series of cash flows by discounting them back to the present day, used in capital budgeting to assess the profitability of an investment.