Which of the following is a consequence of collusion in fraud?

Prepare for ASU ACC231 Exam 2. Utilize multiple choice questions, flashcards, and detailed explanations for each question. Enhance your accounting comprehension and ace your exam!

Collusion in fraud refers to a situation where two or more individuals work together to commit fraudulent acts, which can complicate detection and enforcement efforts. When individuals collude, they often devise methods to conceal their activities more effectively than an individual might do alone. This collaboration can create a web of deceit that is harder to unravel, leading to greater challenges for auditors and investigators in identifying fraudulent behavior.

As a result, the collective efforts of multiple individuals can result in increased complexity and a greater likelihood of successfully executing fraudulent activities without detection. The multiple layers of cooperation also mean that the usual checks and balances that might catch an individual fraudster could be circumvented, further increasing the risk of fraud going unnoticed.

Understanding collusion as a factor in fraud highlights the necessity for organizations to implement robust internal controls that not only monitor for individual fraudulent actions but also scrutinize collaborative behaviors that might indicate collusion. This awareness aids in developing more effective fraud prevention strategies.

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