Identify three corporate opportunities that make fraud easier to commit and detection less likely

What will be an ideal response?

• Weak or nonexistent internal controls
• Failure to enforce/monitor internal controls
• Management not involved in control system or overriding controls
• Unusual or complex transactions such as the consolidation of two companies
• Accounting estimates requiring significant subjective judgment by management
• Managerial carelessness, inattention to details
• Dominant and unchallenged management
• Ineffective oversight by board of directors
• Nonexistent or ineffective internal auditing staff
• Insufficient separation of authorization, custody, and record-keeping duties
• Inadequate supervision or too much trust in key employees
• Unclear lines of authority
• Lack of proper authorization procedures
• No independent checks on performance or infrequent third-party reviews
• Inadequate documents and records
• Inadequate system for safeguarding assets
• No physical or logical security system
• No audit trails

The list show here can be augmented by the items in Table 5-4 listed in the Other Factors column.