Question 1

What is the meaning of "short sell?"

Accepted Answer

A)  Buy shares from a brokerage firm and enter into a forward transaction to sell the shares at today's price on a future date. 
B)  Sell the shares at today's price to an investor and enter into an option agreement to buy the shares back in the near future. 
C)  Buy shares from one brokerage firm and sell the shares to another brokerage firm with a view to make quick money. 
D)  Borrow shares from a brokerage and sell the shares at today's price with the intention to repay the borrowed stock they sold at some future time when the stock is trading for a lower price. 
A)  Buy shares from a brokerage firm and enter into a forward transaction to sell the shares at today's price on a future date. 
B)  Sell the shares at today's price to an investor and enter into an option agreement to buy the shares back in the near future. 
C)  Buy shares from one brokerage firm and sell the shares to another brokerage firm with a view to make quick money. 
D)  Borrow shares from a brokerage and sell the shares at today's price with the intention to repay the borrowed stock they sold at some future time when the stock is trading for a lower price.

Question 2

Company XYZ had a long-standing relationship with a leading law firm. In fact, the law firm's business with this company was one of its most profitable relationships. If the law firm decides that it no longer wants to conduct business with the company, this is:

Accepted Answer

A)  Indicative that the company might have a lot of customer lawsuits against it 
B)  Not any sort of meaningful indicator of fraud activity 
C)  A large cause for concern that financial statement fraud may be occurring 
D)  An indication that the client has likely outgrown the law firm 
A)  Indicative that the company might have a lot of customer lawsuits against it 
B)  Not any sort of meaningful indicator of fraud activity 
C)  A large cause for concern that financial statement fraud may be occurring 
D)  An indication that the client has likely outgrown the law firm

Question 3

Which of the following would be least likely to indicate potential fraud activity?

Accepted Answer

A)  Increased borrowing at one specific bank 
B)  Increased numbers of short sales by investors 
C)  Increased business with related parties 
D)  Increased customer appreciation activities 
A)  Increased borrowing at one specific bank 
B)  Increased numbers of short sales by investors 
C)  Increased business with related parties 
D)  Increased customer appreciation activities

Question 4

Which of the terms refers to the ability to anticipate a fraud perpetrator's likely method of concealing a fraud?

Accepted Answer

A)  Zero-order reasoning 
B)  Deductive reasoning 
C)  Strategic reasoning 
D)  Low-order reasoning 
A)  Zero-order reasoning 
B)  Deductive reasoning 
C)  Strategic reasoning 
D)  Low-order reasoning

Question 5

Frauds are more likely to occur in:

Accepted Answer

A)  large, historically profitable companies. 
B)  companies with an active board of directors. 
C)  smaller companies where one or two individuals have almost all control in decision making. 
D)  any company, as the probability of a fraud does not change with the size of a company. 
A)  large, historically profitable companies. 
B)  companies with an active board of directors. 
C)  smaller companies where one or two individuals have almost all control in decision making. 
D)  any company, as the probability of a fraud does not change with the size of a company.

Question 6

What are special purpose entities (SPEs)?

Accepted Answer

A)  Fictitious organizations formed to perpetrate a financial statement fraud 
B)  Business interests formed solely to accomplish some specific task or tasks 
C)  Bodies formed to establish audit reporting standards and rules 
D)  Independent audit boards set up to ensure that financial statements are verified 
A)  Fictitious organizations formed to perpetrate a financial statement fraud 
B)  Business interests formed solely to accomplish some specific task or tasks 
C)  Bodies formed to establish audit reporting standards and rules 
D)  Independent audit boards set up to ensure that financial statements are verified

What is the meaning of "short sell?"

Company XYZ had a long-standing relationship with a leading law firm. In fact, the law firm's business with this company was one of its most profitable relationships. If the law firm decides that it no longer wants to conduct business with the company, this is:

Which of the following would be least likely to indicate potential fraud activity?

Which of the terms refers to the ability to anticipate a fraud perpetrator's likely method of concealing a fraud?

Frauds are more likely to occur in:

What are special purpose entities (SPEs)?

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

Data-Driven Fraud Detection

Investigating Theft Acts

Investigating Concealment

Conversion Investigation Methods

Inquiry Methods and Fraud Reports

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

E-Commerce Fraud

Legal Follow-Up

Filters

Exam 11: Financial Statement Fraud

What is the meaning of "short sell?"

Company XYZ had a long-standing relationship with a leading law firm. In fact, the law firm's business with this company was one of its most profitable relationships. If the law firm decides that it no longer wants to conduct business with the company, this is:

Which of the following would be least likely to indicate potential fraud activity?

Which of the terms refers to the ability to anticipate a fraud perpetrator's likely method of concealing a fraud?

Frauds are more likely to occur in:

What are special purpose entities (SPEs)?

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

Data-Driven Fraud Detection

Investigating Theft Acts

Investigating Concealment

Conversion Investigation Methods

Inquiry Methods and Fraud Reports

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

E-Commerce Fraud

Legal Follow-Up

Filters