In a collusive environment:
A) management is responsible for all acts of fraud.
B) the fear of detection is usually more than adequate to stop fraud by senior management.
C) internal and external auditors must design procedures to detect such activity.
D) All of the choices are correct.

Question

Quizplus · Accepted Answer

In a collusive environment, internal and external auditors must design procedures to detect fraudulent activity. Management may be involved in the collusion, so they cannot be fully responsible for all acts of fraud. Additionally, the fear of detection may not always be enough to stop fraud, especially if the colluding parties feel that there is a low risk of being caught. Therefore, auditors must be vigilant in detecting and preventing fraud in collusive environments.

In a Collusive Environment