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Section 1
) and which may 
have to be investigated by internal audit (
Chapter 9
). It is 
important that you are able to identify signs of fraud in 
different circumstances (
Section 2
). 
You also need to have a good knowledge of both how 
fraud is prevented and detected. Although there may be 
significant costs involved in implementing a good system 
of fraud prevention, the consequences of successful fraud 
may be very serious, both for the reputation of the 
organisation and the position of its directors. 
Sections 3
, 
4
and 
5
explore these issues. 
Money laundering can be a serious problem. 
Section 6
shows how systems can be set up to help detect and 
prevent this. 
BPP Tutor Toolkit Copy

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PART C: ACCOUNTING AND REPORTING SYSTEMS, CONTROLS AND COMPLIANCE 
 
268
 
Study Guide 
Intellectual level
 
C7 Fraud and fraudulent behaviour and their prevention in 
business 
(a) Explain the circumstances under which fraud is likely to arise. 
K 
(b) Identify different types of fraud in the organisation. 
K 
(c) Explain the implications of fraud for the organisation. 
K 
(d) Explain the role and duties of individual managers in the fraud 
detection and prevention process. 
K 
(e) Define the term money laundering. 
K 
(f) Give examples of recognised offences under typical money 
laundering regulations. 
K 
(g) Identify methods for detecting and preventing money 
laundering. 
K 
(h) Explain how suspicions of money laundering should be 
reported to the appropriate authorities. 
K 
The practical aspects of fraud (where it might actually occur, how it can be detected) are the most likely 
topics to be examined.