Reference no: EM132690278

The following is a list of incentives and pressures, opportunities, and rationalizations to commit fraud:

1.Poor tone at the top

2.Falling profits

3.No inventory count, so losses are not known

4.Petty cash box often left unattended

5.Management bonuses tied to profit

6.The finance vice-president having investment authority without any review

7.Planning to list on stock exchange

8.Business losses

9.View that internal controls are not important

10.Everyone is doing it

Problem 1: Which of the following correctly categorizes the items as incentives, opportunities, and rationalizations?

Option 1: Incentive: 2, 5, 7, 8; Opportunity: 3, 4, 6; Rationalization: 1, 9, 10

Option 2: Incentive: 2, 4, 6, 9; Opportunity: 3, 5, 8; Rationalization: 1, 7, 10

Option 3: Incentive: 3, 9; Opportunity: 1, 4, 6, 10; Rationalization: 2, 5, 7, 8

Option 4: Incentive: 1, 8, 10; Opportunity: 2, 7, 9; Rationalization: 3, 4, 5, 6

Option 5: None of the above