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Which of the following statements is true of embezzlement? It refers to making payments to a person who has facilitated a cri
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Answer to the given question is

Embezzlement is a type of financial fraud. It is the act of withholding assets for the purpose of conversion of such assets,by one or more persons to whom assets were entrusted,either to be held or to be used for specific purposes.It is committed by the person who has lawful possession of property.

Analysis of given options

  • Making payments to a person who has facilitated criminal transaction

The given case is true as the person who has control over funds making payments to a person who has    facilitated  criminal transaction , as the funds are used for the purpose of the person who makes the payment.

  • It is a crime easily committed when there is a lack of internal control over funds

The given case is true.Embezzlement can be easily committed when there is lack of internal control.If there no internal control,there is no control over payments and receipts ,therefore funds are prone to embezzlement.

  • It is hardly committed by highly trusted employees with access to cash or check writing process

Given statement is false.It can be easily committed by highly trusted employees as they are having access to cash or check payment processes without having any control from top management,hence embezzlement can be easily committed.

  • Increase chances of more similar frauds if consigned checks are used

Given statement is true ,as the person holding consigned checks may use them for his personal purpose.Hence there is chance of increase of more similar frauds(embezzlement).

  • Excludes appropriation of funds for personal use by an employee from an employer

Given statement is false as embezzlement includes appropriation of funds for personal use by an employee from an employer as he has lawful possession of property and used for personal purpose.

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