Final answer:
The statement is false; effective internal controls are intended to reduce the risk of fraud in organizations by implementing structured environments and checks and balances to deter and detect unauthorized activities.
Step-by-step explanation:
The statement 'Good controls will often increase opportunities for individuals to commit fraud within an organization' is False. On the contrary, effective internal controls are designed to reduce the risk of fraud by enforcing checks and balances, thereby safeguarding an organization's assets. These controls include segregating duties among different employees, authorizing transactions, and conducting periodic audits. Good controls aim to prevent fraudulent behavior by creating a structured environment where unauthorized actions are easily detected, and accountability is established.
Organizations may face challenges from within, with individuals aware of mismanagement or corrupt practices. The bureaucracy often protects its reputation and resists criticism, which can deter whistleblowers from reporting wrongdoing due to fear of retaliation. Although good controls do not eliminate the possibility of fraud entirely—since determined fraudsters may find sophisticated ways to circumvent them—they certainly do not increase fraud opportunities as a rule. Instead, good controls, when properly implemented and followed, are an organization's first line of defense against fraud.