Question

select all that apply how can ineffective monitoring of management create the opportunity for fraud? (select all that apply.) multiple select question. lack of oversight by the external auditors ineffective oversight of the internal controls domination of management by one person ineffective oversight of the financial reporting process good liaison between management and statutory auditors of the organization

Answer 1

Ineffective monitoring can lead to fraud by allowing unchecked financial manipulation and power consolidation within management. Good liaison between management and auditors, however, discourages such fraud.

Step-by-step explanation:

Ineffective monitoring of management can create the opportunity for fraud by enabling certain adverse conditions within a corporation. If there is lack of oversight by the external auditors or ineffective oversight of the internal controls, management can manipulate financial data without detection. Furthermore, domination of management by one person can lead to a concentration of power that overrides checks and balances, facilitating fraudulent activity. Conversely, good liaison between management and statutory auditors can improve transparency and reduce the chance of fraud, but this is not a factor that would create an opportunity for fraud.