Test Bank For Fraud Examination 4th Edition by Albrecht – Test Bank

$20.00

Description

 

Test Bank For Fraud Examination 4th Edition by Albrecht – Test Bank

 

 Sample  Questions

 

TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS
Pool Canvas
Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish
which default options, such as feedback and images, are available for question creation.
Add Creation Settings
Name Chapter 14–Fraud Against Organizations
Description
Instructions Modify
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is more likely to help detect occupational frauds?
Answer An internal audit
An external audit
A tip
Internal controls
Add Question Here
Multiple Choice 0 points Modify Remove
Question Larceny is easier to detect than skimming because:
Answer larceny involves stealing cash after it has already been recorded in the company’s accounting system.
larceny involves fraudulent disbursements of cash, while skimming involves fraudulent receipts of cash.
larceny involves stealing cash before it has been recorded in the company’s accounting system.
larcenies can take place in any circumstance in which an employee has access to cash.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The 2010 ACFE Report to the Nation on Occupational Fraud & Abuse covers three types of fraud against organizations: Which of the
following is one of them?
Answer Corruption
Bid-rigging
Check tampering
Lapping
Add Question Here
Multiple Choice 0 points Modify Remove
Question A conflict of interest occurs when:
Answer an employer knows of an employee’s interest in a business deal or negotiation.
an employee has an undisclosed economic or personal interest in a transaction that adversely affects the company.
employees offer, give, receive or solicit anything of value in order to influence an official act.
employees demand payments from vendors for deciding in the vendors’ favor.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Asset misappropriation is defined as:
Answer a scheme that involves offering, giving, receiving, or soliciting anything of value to influence an official act.
demanding payment from a vendor in order to make or influence a decision in a vendor’s favor.
deceiving individuals in putting their money into a fake investment.
any scheme that involves the theft or misuse of an organization’s assets.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which fraud is committed by an employee who doesn’t record customer sales and pockets the payment?
Answer Larceny
Disbursement
Skimming
Illegal gratuities
Add Question Here
Multiple Choice 0 points Modify Remove
Question An ice cream store cashier sells two-scoop ice cream cones to customers and enters the sales as single-scoop sales, while keeping the
difference for himself. Which fraud is being committed here?
Answer Larceny
Disbursement
Skimming
Illegal gratuities
Add Question Here
Multiple Choice 0 points Modify Remove
1 of 6
Question Which of the following statements regarding larceny is NOT true?
Answer Larceny is easier to detect than skimming and is less common.
Larceny occurs when employees steal cash before the amounts have been recorded in the accounting system.
Smaller occurrences of larceny are often written off as “shorts” or “miscounts.”
Perpetrators of larcenies must have direct access to inventory or other assets.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Bid-rigging is a type of _______ .
Answer skimming
bribery
extortion
illegal gratuity
Add Question Here
Multiple Choice 0 points Modify Remove
Question Check tampering is a type of _____.
Answer larceny
skimming
fraudulent disbursement scheme
fraudulent statement scheme
Add Question Here
Multiple Choice 0 points Modify Remove
Question ________ occurs when an employee demands a payment from a vendor in order to make a decision in that vendor’s favor.
Answer Bribery
Larceny
Economic extortion
Illegal gratuity
Add Question Here
Multiple Choice 0 points Modify Remove
Question Lapping is:
Answer embezzling one customer’s payment and then crediting that customer’s account when a subsequent customer pays.
stealing cash from an organization before it is recorded on the organization’s books and records.
helping a vendor illegally obtain a contract that should have involved competitive bidding.
demanding a payment from a vendor in order to make a decision in that vendor’s favor.
Add Question Here
Multiple Choice 0 points Modify Remove
Question According to the ACFE study, the most common form of occupational fraud is:
Answer bid-rigging.
fraudulent statements.
corruption.
asset misappropriation.
Correct Feedback
Feedback
A Incorrect.
B Incorrect.
C Incorrect.
D Correct.
Incorrect Feedback
Feedback
A Incorrect.
B Incorrect.
C Incorrect.
D Correct.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Frauds against the organization are most likely to be perpetrated by _____.
Answer customers
vendors
competitors
employees
Add Question Here
Multiple Choice 0 points Modify Remove
Question The following are different types of corruption EXCEPT:
Answer extortion.
conflict of interest.
lapping.
bribery.
Add Question Here
Multiple Choice 0 points Modify Remove
2 of 6
Question In asset misappropriation, the fraudsters most often target ______.
Answer inventory
cash
equipment
valuable information
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which is the least common expense disbursement scheme?
Answer Mischaracterizing expenses
Submitting the same expenses multiple times
Submitting fictitious expenses
Overstating expenses
Add Question Here
Multiple Choice 0 points Modify Remove
Question According to the ACFE study, ________ comprises by far the highest percentage of asset misappropriation.
Answer larceny
skimming
delayed payment recognition
fraudulent disbursement
Add Question Here
Multiple Choice 0 points Modify Remove
Question All of the following are possible ways to commit fraud by using a payroll scheme EXCEPT:
Answer overstating expenses.
falsifying hours worked.
creating ghost employees.
producing false worker compensation claim.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The least costly disbursement scheme is:
Answer check tampering.
billing scheme.
register disbursement scheme.
expense scheme.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Identify the two basic bribery schemes.
Answer Larceny and skimming
Kickbacks and bid-rigging
Economic extortion and illegal gratuity
Lapping and extortion
Add Question Here
Multiple Choice 0 points Modify Remove
Question According to the ACFE study described in the text, which fraudulent disbursement scheme occurs most frequently?
Answer Billing scheme
Wire transfers
Payroll scheme
Register disbursements
Add Question Here
Multiple Choice 0 points Modify Remove
Question Claiming personal travel as a business expense, a personal lunch as a business lunch, altering a receipt to reflect a higher amount than
was actually paid, or submitting fictitious receipt is an example of ________.
Answer a billing scheme
a payroll disbursement scheme
a register disbursement scheme
an expense reimbursement scheme
Add Question Here
Multiple Choice 0 points Modify Remove
Question Thefts of inventory are divided into two groups. Identify them.
Answer Corruption and bribery
Expense scheme and skimming
Economic extortion and illegal gratuities
Larceny and misuse
Add Question Here
Multiple Choice 0 points Modify Remove
3 of 6
Question Which of the following is the best example of theft of cash through skimming?
Answer Preparing fraudulent checks.
Understating sales by recording larger-than reality sales discounts.
Setting up dummy companies.
Stealing cash after it has already been recorded.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following statements with reference to extortion is true?
Answer It is a crime even if the extortion message is only sent but not received.
It is a crime only if the extortion message has reached the recipient.
It is a crime even if the extortion message is sent either unwillingly or without the knowledge of the sender.
An extortionate threat made to another in jest is not extortion.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Identify the statement that does NOT represent one of the four types of corruption.
Answer Offering, giving, receiving, or soliciting anything of value in order to influence an official act.
Overbilling the company for travel and other related business expenses, such as business lunches, hotel bills, and air travel.
The employee demands a payment from a vendor in order to make a decision in that vendor’s favor.
The exertion of an employee’s influence to the detriment of his or her company.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following examples is NOT a billing scheme?
Answer Mary purchases a new laptop for her brother-in-law with company’s funds.
Mark submits a receipt of his cab fare for reimbursement, which includes an extra $10.
Joven double pays a vendor for the purchase of inventory and then pockets the second payment when it is returned.
Harry submits invoices in the name of the dummy company and collects the amount.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Two basic fraudulent register disbursement schemes are:
Answer purchase schemes and sales schemes.
bid-rigging schemes and kickbacks.
ghost employees and commission schemes.
false refunds and false voids.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Identify the most common conflict of interest schemes.
Answer purchase schemes and sales schemes
bid-rigging schemes and kickbacks
ghost employees and commission schemes
false refunds and false voids.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is an example of a register-disbursement scheme?
Answer A perpetrator who processes transactions as if a customer were returning merchandise, even though there is no actual return.
A perpetrator uses the expense register to falsely record expenses that are then paid out by the A/P department.
A perpetrator physically prepares a check from the check register claiming it is a legitimate expense when it is not.
A perpetrator slowly takes money from the register drawer after making regular sales, showing that a discount was given to a customer
on the receipt.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The most common occupational frauds in small businesses involve employees doing all of the following EXCEPT:
Answer skimming revenues.
fraudulently writing company checks.
processing fraudulent invoices.
altering financial statement.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which department or group accounted for the maximum percentage of fraud incidents according to the study conducted by ACFE in
2010?
Answer sales
accounting
human resources
top management
Add Question Here
Multiple Choice 0 points Modify Remove
4 of 6
Question Kickback schemes almost always attack the _____ function of the victim company.
Answer sales
accounting
human resources
purchasing
Add Question Here
Multiple Choice 0 points Modify Remove
Question Employees, vendors, and customers of organizations have three opportunities to steal assets. Which of the following is NOT one among
them?
Answer Steal receipts of cash and other assets as they are coming into an organization.
Steal cash, inventory, and other assets that are on hand.
Commit disbursement fraud by having the organization pay for something it shouldn’t pay for or pay too much for something it
purchases.
Paying off public officials or company insiders for preferential treatment.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Of all payroll fraud schemes, ______ schemes tend to generate the largest losses.
Answer commission
falsified hours and salary
ghost employee
false worker compensation
Add Question Here
Multiple Choice 0 points Modify Remove
Question What is known as the net asset value (NAV)?
Answer The closing price of the securities that comprise a particular fund’s portfolio plus the value of any uninvested cash that the fund
manager maintains for the fund.
A concept used in finance and economics, defined as a rational and unbiased estimate of the potential market price of a good, service,
or asset.
The value of an entity’s assets plus the value of its liabilities at the end of the trading day.
The difference between the replacement cost of a fixed asset and its book value appearing on the balance sheet.
Add Question Here
Multiple Choice 0 points Modify Remove
Question For ghost-employee fraud schemes to work, four things must happen. Which of the following is NOT one among them?
Answer The ghost must be added to the payroll.
Timekeeping and wage rate information must be collected.
A paycheck must be issued to the ghost.
The payment must be made based on an employee’s revenue output.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Check tampering is unique among the disbursement frauds because:
Answer the fraud perpetrator processes the transaction as if a customer were returning merchandise, even though there is no actual return.
it is the one group of schemes in which the perpetrator physically prepares the fraudulent check.
it is the one group of schemes in which the culprit generates a payment to himself or herself by submitting some false document to the
victim company, such as an invoice or a timecard.
the perpetrator does not have to undergo the risk of taking company cash or merchandise.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT one of the most common types of billing schemes?
Answer Setting up dummy companies (shell companies) to submit invoices to the victim organization.
Altering or double-paying a nonaccomplice vendor’s statements
Overbilling the company for travel and other related business expenses, such as business lunches, hotel bills, and air travel.
Making personal purchases with company funds.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Identify the unlawful trading schemes engaged in by mutual funds.
Answer Leveraging and layering
Commission fraud and speculative trading
Market timing and late trading
Circular trading and NAV manipulation
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT an example of a commission-based payroll fraud?
Answer Creating fictitious sales.
Manipulating the number of hours worked and the rate of pay.
Falsifying the value of sales made by altering prices listed on sales documents.
Overstating sales by claiming sales made by another employee or in another period.
5 of 6
Add Question Here
Multiple Choice 0 points Modify Remove
Question Commercial bribery is similar to the traditional definition of bribery except that in commercial bribery:
Answer something of value is offered to influence a business decision
payment is received by an employee with the employer’s consent.
the employee extorts money from a potential purchaser or supplier.
something of value is offered to influence an official act of government.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The primary victim of a workers’ compensation fraud is ______.
Answer the government
the employer
the vendor
the insurance carrier
Add Question Here
Multiple Choice 0 points Modify Remove
Question What is the point of difference between illegal gratuity and bribery scheme?
Answer Compared to illegal gratuities, briberies occur relatively infrequently and are usually quite small.
Illegal gratuities do not necessarily involve an intent to influence a business decision but rather to reward someone for making a
favorable decision.
Illegal gratuities always involves the use of actual or threatened force, fear, or economic duress.
Illegal gratuities are made before deals are approved.
Add Question Here
Multiple Choice 0 points Modify Remove
Question What is known as dilution?
Answer The artificial difference between the NAV and the fair value of the securities.
An investment technique that involves short-term “in-and-out” trading of mutual fund shares.
The loss resulting from “forward pricing” requirements.
The harm caused by the transfer of wealth from long-term investors to market timers.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Orders placed for buying shares of a mutual fund any time up to 4:00 p.m. are priced at that day’s NAV, and orders placed after 4:01 p.m.
are priced at the next day’s NAV. What is this practice known as?
Answer Forward pricing
Late trading
Price arbitrage
Price dealing
Add Question Here
Multiple Choice 0 points Modify Remove
Question _____ allowed selected investors to purchase mutual funds after 4:00 p.m., using that day’s NAV, rather than the next day’s NAV, as
required under the law.
Answer Forward pricing
Late trading
Backdating
Circular trading
Add Question Here
6 of 6

 

TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS
Pool Canvas
Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish
which default options, such as feedback and images, are available for question creation.
Add Creation Settings
Name Chapter 3–Fighting Fraud: An Overview
Description
Instructions Modify
Add Question Here
Multiple Choice 0 points Modify Remove
Question Research has shown that ______ detect most frauds.
Answer Auditors
Customers
Vendors
Employees
Add Question Here
Multiple Choice 0 points Modify Remove
Question All of the following are methods that organization can adopt to proactively eliminate fraud opportunities EXCEPT:
Answer Accurately identifying sources and measuring risks.
Implementing appropriate preventative and detective controls.
Creating widespread monitoring by employees.
Eliminating protections for whistle blowers.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Audits, public record searches, and net worth calculations are used to gather what type of evidence in fraud investigation?
Answer Testimonial
Forensic
Documentary
Observational
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT a part of the evidence square?
Answer Management evidence
Documentary evidence
Testimonial evidence
Physical evidence
Add Question Here
Multiple Choice 0 points Modify Remove
Question All of the following factors can be associated with high levels of fraud and detract from a positive work environment EXCEPT:
Answer top management that does not pay attention to behavior of employees.
lack of recognition of job performance.
unrealistically low pay.
low turnover.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following approaches is most useful in creating a culture of honesty and integrity in the workplace?
Answer Hiring right kind of employees
Security cameras
Peer evaluations
Ergonomics
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is a component of the evidence square?
Answer Rationalization
Perceived pressure
Personal observation
Perceived opportunity
Add Question Here
Multiple Choice 0 points Modify Remove
Question Civil suits are usually quite rare in cases of employee fraud because:
Answer there is usually not enough evidence to prosecute.
employee fraud is a victimless crime.
it is difficult for a jury to unanimously decide on a conviction.
1 of 6
perpetrators have usually spent the money.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following key activities related to fraud, is the most important and cost-effective way to reduce losses from fraud?
Answer Follow-up legal action
Early fraud detection
Fraud investigation
Fraud prevention
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following element is one of the three basic elements of fraud motivation triangle?
Answer Concealment
Theft
Opportunity
Conversion
Add Question Here
Multiple Choice 0 points Modify Remove
Question Communicating expectations about honesty and integrity throughout a company includes all of the following elements EXCEPT:
Answer identifying appropriate values and ethics.
fraud awareness training.
consistent punishment for violators.
insisting that top management model appropriate behavior.
Add Question Here
Multiple Choice 0 points Modify Remove
Question In an organization, individuals who suspect fraud usually don’t come forward because they:
Answer are sure that perpetrator will get caught one day.
do not want to accuse someone.
fear being branded as a whistle-blower.
will loose their dignity in the workplace.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Studies show that legal action against fraudsters is typically taken:
Answer Less than 25 percent of the time.
Less than 50 percent of the time.
More than 75 percent of the time.
At least 50 percent of the time.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT one of the ways in which a fraud investigation must be conducted?
Answer Investigators should be experienced and objective professionals.
Investigators should closely guard all hypotheses regarding guilt or innocence of individuals being investigated.
Investigators should not keep management apprised of the investigations process.
Investigators must be sure to follow appropriate investigative techniques.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Stuart, a CFE, is investigating a possible management fraud. He found an email on an employee’s computer to use as evidence in the
case. Under which category of evidence would an email message fall?
Answer Testimonial evidence
Documentary evidence
Physical evidence
Personal observation
Add Question Here
Multiple Choice 0 points Modify Remove
Question Organizations and individuals that have proactive fraud prevention measures usually find that their prevention efforts:
Answer helps in training employees about appropriate behavior.
often prompt smaller frauds.
pay big dividends.
helps in severely punishing fraud perpetrators.
Add Question Here
Multiple Choice 0 points Modify Remove
Question When perceived pressures and(or) opportunities are low, a person needs more ________ to commit fraud.
Answer support from people at workplace
rationalization
courage
motivation
2 of 6
Add Question Here
Multiple Choice 0 points Modify Remove
Question Recent research has shown that there is an ethical maturity model (EMM) that explains why people make unethical decisions, and there
are four levels in it. Which of the following level is NOT one among them.
Answer Personal ethical understanding
Corporate code of ethics
Application of ethics
Ethical courage
Ethical leadership
Add Question Here
Multiple Choice 0 points Modify Remove
Question Recent research has shown that there is an ethical maturity model (EMM) that explains why people make unethical decisions. Which of
the following represents the foundation of ethics according to this model?
Answer Personal ethical understanding
Ethical courage
Ethical leadership
Application of ethics to business situations
Add Question Here
Multiple Choice 0 points Modify Remove
Question A person may have very strong ethics in the way he or she treats family and friends, but not understand how failure to submit tax
withholdings to the government affects peoples’ lives or constitutes unethical or fraudulent behavior. This is an ethical issue encountered in which
level of the ethical maturity model?
Answer Personal ethical understanding
Ethical courage
Ethical leadership
Application of ethics to business situations
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which level in the ethical maturity model can be summarized as “willingness to pay the price for ethics?”
Answer Ethical positioning
Ethical courage
Personal ethical understanding
Application of ethics to business situations
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which is the highest level in the ethical maturity model?
Answer Ethical leadership
Ethical courage
Personal ethical understanding
Application of ethics to business situations
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is the largest employee group in most organizations?
Answer Employees who display ethical leadership
Group of employees who will always be honest
Group of employees who will be dishonest anytime it benefits them
Swing group of employees who could be honest or dishonest
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is true of the “swing group” of employees in organizations?
Answer Individuals in this group have situational ethics.
Individuals in this group are dishonest at all times.
Individuals in this group do not know how to translate their ethical values to the business world.
Individuals in this group completely lack ethical courage.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Research on honesty shows that individuals fall into three groups:
(1) those who will almost always be honest,
(2) those who are situationally honest, and
(3) those who will always be dishonest.
Which of these groups is (are) the biggest?
Answer Group 1 (50%)
Group 2 (40%)
Group 3 (45%)
Groups 1 and 3 (35% each)
Add Question Here
Multiple Choice 0 points Modify Remove
3 of 6
Question Which legislation makes it compulsory for every public company to have a code of conduct to convey expectations about what is and is
not appropriate for its directors and officers?
Answer Sherman Act
Glass-Steagall Act
Sarbanes Oxley Act
Gramm-Leach-Bliley Act
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following statements is TRUE?
Answer External auditors are usually specifically trained to detect fraud.
Audits of books and records rarely discover frauds.
Less than 5 percent of all frauds are detected by auditors.
The presence of auditors provides a major deterrent effect.
Add Question Here
Multiple Choice 0 points Modify Remove
Question In the ethical maturity model, instilling in others a desire to develop ethical awareness and courage is referred to as:
Answer Personal codes of ethics.
Ethical motivation.
Ethical leadership.
Application of ethics to business situations.
Add Question Here
Multiple Choice 0 points Modify Remove
Question In the past, most frauds were detected:
Answer by surveillance and undercover operations.
by accident.
by providing ways for people to report suspicions of fraud.
by examining transaction records and documents to determine if there are anomalies that could represent fraud.
Add Question Here
Multiple Choice 0 points Modify Remove
Question In recent years, organizations have implemented a number of initiatives to more proactively detect fraud. The first and most common
proactive fraud detection approach has been to:
Answer install reporting hotlines.
conduct undercover operations.
introduce round-the-clock invigilation.
collect physical evidence.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is an example of a whistle-blowing system?
Answer Bulletin board service
Supervisor intervention
Removing middle management layer
Fraud reporting hotline
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is a prerequisite for a fraud investigation?
Answer Predication
A specific allegation of fraud against another party
Consistent bottom-line improvement
Rationalization
Add Question Here
Multiple Choice 0 points Modify Remove
Question Although there are multiple approaches to fraud investigation, most investigators tend to rely heavily on ______.
Answer invigilation
surveillance
interviews
honesty tests
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which type of evidence is gathered from individuals using investigative techniques such as interviewing, interrogation, and honesty tests?
Answer Documentary evidence
Testimonial evidence
Physical evidence
Personal observation
Add Question Here
Multiple Choice 0 points Modify Remove
4 of 6
Question Some of the most common investigative techniques for gathering this evidence include data mining, audits, computer searches, net worth
calculations, and financial statement analysis.
Answer Documentary evidence
Testimonial evidence
Physical evidence
Personal observation
Add Question Here
Multiple Choice 0 points Modify Remove
Question Investigative techniques under which approach include invigilation, surveillance, and covert operations?
Answer Documentary evidence
Testimonial evidence
Physical evidence
Personal observation
Add Question Here
Multiple Choice 0 points Modify Remove
Question All of the following are part of the fraud element triangle EXCEPT:
Answer Theft act
Concealment
Conversion
Layering
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which investigative method would be used to catch a fraud perpetrator while he/she is actually receiving a kickback?
Answer Theft act
Concealment
Conversion
Layering
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which investigative method involves searching for ways in which perpetrators have spent or used their stolen assets?
Answer Theft act
Concealment
Conversion
Layering
Add Question Here
Multiple Choice 0 points Modify Remove
Question The gathering of this type of evidence in a fraud investigation often involves forensic analysis by experts.
Answer Management evidence
Testimonial evidence
Physical evidence
Personal observation
Add Question Here
Multiple Choice 0 points Modify Remove
Question The most effective way to involve employees in the monitoring process is to provide a protocol for:
Answer communication.
personality.
leadership skills.
behavior.
Add Question Here
Multiple Choice 0 points Modify Remove
Question _______ refers to the circumstances, taken as a whole, that would lead a reasonable, prudent professional to believe a fraud has
occurred, is occurring, or will incur.
Answer Suspension
Probation
Predication
Retaliation
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following statements is NOT true?
Answer It is much more difficult to get a criminal conviction than it is to get a judgment in a civil case.
Only a preponderance of the evidence (more than 50 percent) is necessary to win a civil case.
Criminal convictions are only successful if there is 100 percent proof that the perpetrator “intentionally” stole money or other assets.
Civil actions are quite rare in cases of employee fraud because perpetrators have usually spent the money they stole.
Add Question Here
Multiple Choice 0 points Modify Remove
5 of 6
Question Which one of the following was NOT discussed as a way to create a culture of honesty and integrity?
Answer Offer rewards for honest behavior
Communicate expectations throughout the organization
Hire the right kinds of employees
Create a positive work environment
Add Question Here
Multiple Choice 0 points Modify Remove
Question Research in moral development strongly suggests that honesty can be best reinforced when:
Answer expectations of honesty are implied.
fraud perpetrators are given a second chance.
fraud perpetrators are severely punished.
a proper example is set by management.
Add Question Here
6 of 6

 

TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS
Pool Canvas
Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish
which default options, such as feedback and images, are available for question creation.
Add Creation Settings
Name Chapter 5–Recognizing the Symptoms of Fraud
Description
Instructions Modify
Add Question Here
Multiple Choice 0 points Modify Remove
Question Who in an organization is NOT in a good position to recognize fraud during the theft act?
Answer Other employees
Managers
Auditors
Coworkers
Add Question Here
Multiple Choice 0 points Modify Remove
Question In which stage do auditors have a good chance of detecting fraud, if the audit samples include altered documents and miscounts?
Answer Theft act
Concealment
Conversion
Layering
Add Question Here
Multiple Choice 0 points Modify Remove
Question Implementing a system of independent checks is one of the most effective ways to deter fraud. Which one of the following is NOT a way
of providing independent checks on employees?
Answer Employee transfers
Audits
Mandatory vacations
Single endorsement on checks
Add Question Here
Multiple Choice 0 points Modify Remove
Question Increased scrap, excessive purchases, physical abnormalities, etc. are all examples of:
Answer accounting anomalies.
external control weaknesses.
analytical anomalies.
unusual behavior.
Add Question Here
Multiple Choice 0 points Modify Remove
Question There are three simple procedures that small business owners should do on a timely basis to prevent fraud when they can’t afford
sufficient employees to guarantee effective segregation of duties.. Which of the following is NOT one among them?
Answer Pay everything by check so that there is a record.
Always open the bank statement and reconcile it themselves.
Allow one key employee to operate the bank account personally.
Sign every check themselves and not delegate the signing to anyone else.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Recording an expense to conceal fraud involves making a fictitious journal entry. A faulty journal entry is an example of which fraud
symptom?
Answer Accounting anomaly
Internal control weakness
Unusual behavior
Analytical anomaly
Add Question Here
Multiple Choice 0 points Modify Remove
Question Fraud examiners must be able to recognize signals that a journal entry may have been manufactured to conceal a fraud. Which of the
following is a common journal entry fraud symptom?
Answer Journal entries with documentary support.
Journal entries that balance.
Adjustments to receivables or payables that are clearly explained.
Journal entries made near the end of an accounting period
Add Question Here
Multiple Choice 0 points Modify Remove
1 of 5
Question In most organizations, coworkers and others have knowledge or suspicions that fraud is occurring but do not come forward with their
information. There are several major reasons for this hesitancy. Which of the following is NOT one among them?
Answer It is usually impossible to know for sure that a fraud is taking place.
They are least bothered if whatever is happening is not affecting their work.
They fear reprisal for being a whistle-blower.
They often think that squealing on someone is wrong.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Common accounting anomaly fraud symptom involve problems with various data and books of accounts. Which of the following is NOT
one among them?
Answer Faulty journal entries
Inaccuracies in source documents
Rounding adjustments
Inaccuracies in ledgers
Add Question Here
Multiple Choice 0 points Modify Remove
Question How does a smart embezzler manipulate accounting records to conceal fraud?
Answer By increasing assets.
By manipulating stock accounts.
By manipulating dividends.
By increasing expenses.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Inaccuracies in ledgers represent which type of fraud symptom?
Answer Internal control weaknesses
Analytical anomalies
Accounting anomalies
Unusual behaviors
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is an example of accounting anomaly fraud symptom?
Answer Missing documents
Excess purchases
Too many debit or credit memos
Inadequate accounting system
Add Question Here
Multiple Choice 0 points Modify Remove
Question Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by ____
and ____.
Answer guilt, fear
anxiety, insomnia
confidence, rationalization
defensiveness, confession
Add Question Here
Multiple Choice 0 points Modify Remove
Question ______ fraud symptoms are procedures or relationships that are unusual or too unrealistic to be believable.
Answer Analytical
Accounting
Internal control
Environmental
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT an analytical fraud symptom?
Answer Consistent cash shortages
Overriding of existing controls
Excess purchases
Unreasonably high expenses
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is an analytical fraud symptom?
Answer Increase in past due accounts receivable
Significant increase or decrease in account balances
Lack of independent checks
Excessive voids or credits
Add Question Here
Multiple Choice 0 points Modify Remove
2 of 5
Question Fraud occurs when perceived pressure, perceived opportunity and rationalization combine. Which of the following is related to the
problem of segregation of duties?
Answer Julie writes expense checks and Mark collects cash from customers.
Bob order office supplies and deposits the company’s checks.
Steve records receivables and writes off bad debts.
Rebecca records journal entries and orders lunch.
Add Question Here
Multiple Choice 0 points Modify Remove
Question An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.
The above statement symbolizes which fraud symptom?
Answer Accounting anomaly
Internal control weakness
Analytical anomaly
Unusual behavior
Add Question Here
Multiple Choice 0 points Modify Remove
Question Transactions happening at odd times or places; being performed by people who would not normally participate; or including odd
procedures are typically associated with which type of fraud symptom?
Answer Accounting anomaly
Internal control weakness
Analytical anomaly
Unusual behavior
Add Question Here
Multiple Choice 0 points Modify Remove
Question Document symptoms to some extent can signal out that embezzlement is taking place. Which among the following usually do NOT point
to some problem with the source documents?
Answer Photocopied documents
Different names or addresses of payees or customers
Excessive voids or credits
Increased past-due accounts
Add Question Here
Multiple Choice 0 points Modify Remove
Question A major difference between financial statement auditors and fraud examiners is that most financial statement auditors:
Answer merely match documents to see whether support exists and is adequate.
determine whether the documents are real.
determine whether the expenditures make sense.
check whether all aspects of the documentation are in order.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is a highly suspicious financial statement relationship?
Answer Increased revenues with decreased inventory.
Decreased production with decreased scrap.
Increased revenues with increased receivables
Decreased cost per unit with increased level of output
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is a highly suspicious financial statement relationship?
Answer Increased revenues with increased cash flows
Increased volume with decreased cost per unit
Increased inventory with decreased payables
Increased inventory with increased warehousing costs
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following motivates embezzlers to indulge in a fraudulent activity?
Answer Pursuit of immediate gratification.
Safeguard their future.
Cover expenses required to live.
Protection against uncertainties.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following fraud symptoms are often the easiest to detect?
Answer Analytical anomalies
Internal control weaknesses
Accounting anomalies
Lifestyle changes
Add Question Here
3 of 5
Multiple Choice 0 points Modify Remove
Question Which of the following scenarios is least conducive to fraud?
Answer Outstanding bills at home
Mandatory vacation time
Economic downturns
Moral decay in upper management
Add Question Here
Multiple Choice 0 points Modify Remove
Question An employee decides to steal cash from his/her employer. What would be the best way to conceal such a fraud?
Answer Record the stolen cash as an expense.
Writing down accounts payable for a supplier.
Increasing accounts receivable from a customer.
Writing down as dividend paid to shareholders.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT a “strange” financial statement relationship?
Answer Increased revenues with decreased inventory
Increased revenues with decreased receivables
Decreased inventory with decreased payables
Decreased volume with decreased cost per unit
Add Question Here
Multiple Choice 0 points Modify Remove
Question _____ are relationships in financial or nonfinancial data that do not make sense, such as an unreasonable change in a volume, mix, or
price.
Answer Analytical anomalies
Accounting anomalies
Auditing anomalies
Control weaknesses
Add Question Here
Multiple Choice 0 points Modify Remove
Question After committing fraud, an individual often exhibits unusual and recognizable behavior patterns to cope with the stress. Perpetrators
experience this behavioral signals in a particular sequence. Identify it.
Answer Guilt – Stress – Fear – Behavior changes
Fear – Guilt – Stress – Behavior changes
Fear – Guilt – Behavior changes – Stress
Guilt – Fear – Stress – Behavior changes
Add Question Here
Multiple Choice 0 points Modify Remove
Question What does the following journal entry indicate?
Legal Expense………………2,900
Cash………………………….2,900
Answer $2,900 cash is due to an attorney.
A sum of $2,900 was received from attorney in advance.
$2,900 cash is due from an attorney.
An attorney was paid $2,900 in cash.
Add Question Here
Multiple Choice 0 points Modify Remove
Question All transactions related to specific accounts, such as cash or inventory, are summarized in a:
Answer Journal
Ledger
Trial balance
Balance sheet
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is not a fraud symptom related to internal control weaknesses?
Answer Lack of segregation of duties
Lack of physical safeguards
Inadequate accounting system
Lack of proper authorization
Excessive turnover of executives
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which name refers to people who commit a fraud or another crime once in a while and does not feel stress?
4 of 5
Answer Altruists
Utilitarians
Psychopaths
Agnostics
Add Question Here
Multiple Choice 0 points Modify Remove
Question _______ involves the actual taking of cash, inventory, information, or other assets whereas _______ involves selling stolen assets or
transferring them into cash and then spending the cash.
Answer Conversion, coercion
Theft, conversion
Coercion, theft
Theft, coercion
Add Question Here
Multiple Choice 0 points Modify Remove
Question Generally, at the conversion stage, ________ are definitely not in the best position to detect fraud.
Answer co-workers
friends
auditors
managers
Add Question Here
Multiple Choice 0 points Modify Remove
Question Lifestyle changes of fraud perpetrators are related to which of the following fraud elements?
Answer Theft act
Concealment
Conversion
Confession
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following appears to be common to most embezzlers who are caught?
Answer Long-term focus
Investments made in low-risk instruments
Saving what they steal
Spending on lifestyle improvements
Add Question Here
5 of 5