Final Answer:
1. Journal entries without Documented support. Thus, the correct answer is option d Documented.
2. Unexplained Adjustments to receivables, payables, revenues, or expenses. Thus, the correct answer is option b Adjustments.
3. Journal entries that do not Reconcile.Thus, the correct answer is option a Reconcile.
4. Journal entries made by individuals who would Benefit from such entries.Thus, the correct answer is option a Benefit from.
5. Journal entries made near the end of an Accounting period. Thus, the correct answer is option a Accounting period.
Step-by-step explanation:
Fraudulent activities often involve manipulating financial records through deceptive journal entries. One red flag is entries lacking Documented support. In a legitimate financial record, entries should be accompanied by adequate documentation, providing a clear and transparent trail for audit purposes. Without proper documentation, it becomes challenging to verify the authenticity and necessity of the entries. Therefore, the correct answer is option d Documented.
Unexplained Adjustments to receivables, payables, revenues, or expenses can indicate potential fraud. Sudden fluctuations or inconsistencies in these accounts without a clear rationale may signal efforts to manipulate financial results. Such anomalies require thorough investigation to ensure the accuracy and reliability of the financial information presented.Therefore, the correct answer is option b Adjustments.
Valid journal entries should Reconcile, meaning they align with other financial records and transactions. Entries that do not reconcile may indicate errors or intentional misreporting. Reconciliation is a fundamental accounting principle that ensures the accuracy and integrity of financial data, making it a crucial aspect of fraud detection.Therefore, the correct answer is option a Reconcile.
Entries made by individuals who would Benefit from such entries raise concerns about conflicts of interest and potential fraud. Ethical accounting practices dictate that those responsible for financial entries should not have a personal stake in their outcome. This separation helps maintain objectivity and reduces the risk of fraudulent activities designed for personal gain.Therefore, the correct answer is option a Benefit from.
Lastly, entries made near the end of an Accounting period may be an attempt to manipulate financial results before reporting. Such entries, especially if material, warrant close scrutiny during audits to ensure the integrity of financial reporting at the close of the accounting period.Therefore, the correct answer is option a Accounting period.