Question

There is inherent risk of payroll fraud because most transactions involve?

1) expense accounts
2) accrued liabilities
3) estimates
4) cash

Answer 1

Payroll fraud is often associated with cash transactions.

Step-by-step explanation:

The inherent risk of payroll fraud is present because most transactions involve cash.

Payroll fraud refers to the manipulation or misrepresentation of payroll data to gain unauthorized financial benefits. It can occur through various methods such as inflating employee hours, creating fake employees, or altering pay rates.

Since cash transactions are typically involved in payroll, it becomes susceptible to fraudulent activities.