Due to the nature of their functions, internal and external auditors, through the implementation of effective internal controls, are in excellent positions to prevent opportunity-based fraud The fraud triangle helps explain the mechanics of fraud by examining the common contributing factors of perceived opportunity, incentive, and rationalization

A petty cash account is an imprest account, so it is only debited when the fund is initially established or increased in amount. A system of internal control is the policies combined with procedures created by management to protect the integrity of assets and ensure efficiency of operations

fraud — act of intentionally deceiving a person or organization or misrepresenting a relationship in order to secure some type of benefit, either financial or nonfinancial. internal controls — systems used by an organization to manage risk and diminish the occurrence of fraud, consisting of the control environment, the accounting system, and control activities. fraud triangle — concept explaining the reasoning behind a person’s decision to commit fraud; the three elements are perceived opportunity, rationalization, and incentive. petty cash account — an imprest account, so it is only debited when the fund is initially established or increased in amount.