Risk assessment often involves considering where fraud risk may be present.

Required: For each scenario below, choose the appropriate fraud triangle risk factor. Each

selection may be used once, more than once, or not at all. $(7$ points; $1$ point each$)$

The company has an entity$-$level code of

conduct but the employees at the

company don't seem to think that

management cares if they closely attend

to it$.$

The company has many related parties

that it enters into transactions with.

The revenue accounting at the audit

client is complex due to how contracts

are structured and the new employees at

the company haven't familiarized

themselves with this accounting yet.

There has been recent turnover on the

management team and the prior CFO

was fired to not achieving earnings

targets.

The company doesn't have secure IT

systems and is susceptible to potential

cyberattacks.

A shortage of accountants has led to the

company hiring less qualified applicants

in recent years.