The Last Step of the Fraud Fighting Model Is Follow-Up

question 6

Multiple Choice

The last step of the fraud fighting model is follow-up.What is the likely outcome when a company allow perpetrators to go unprosecuted?

• A)The company will avoid bad publicity.
• B)The perpetrator and others in the company will commit fraud again in the future.
• C)The perpetrator will be saved from pain and embarrassment and having learned his or her lesson will not commit fraud again.
• D)Management will send a signal that fraud will not be tolerated.

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Definitions:

Plant Assets

Tangible assets that are used in the operations of a business and are not intended for resale, including buildings, machinery, and equipment.

Natural Business Year

The fiscal year that ends when a business's activities have reached the lowest point in its annual operating cycle, theoretically the most optimal time for financial reporting.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Contra Account

An account used in accounting to offset or reduce the balance of a related principal account.