Question 1

Which of the following is NOT considered fraud?

Accepted Answer

A)  A man armed with a weapon that demands that you hand over your wallet. 
B)  Recklessly prepared financial statements that are incorrect and used by investors. 
C)  Tricking your friend to do your laundry for $20 and then not paying the money. 
D)  Setting up a phantom vendor to impersonate a real vendor. 
A)  A man armed with a weapon that demands that you hand over your wallet. 
B)  Recklessly prepared financial statements that are incorrect and used by investors. 
C)  Tricking your friend to do your laundry for $20 and then not paying the money. 
D)  Setting up a phantom vendor to impersonate a real vendor. A

Question 2

True or false: If a company experiences a $1,000 fraud, it will have to generate $1,000 in additional revenue to make up for the fraud.

Accepted Answer

A)  True 
B)  False 
A)  True 
B)  False B

Question 3

Which of the following statements is most true?

Accepted Answer

A)  Fraud is often less harmful than robbery because it affects fewer people. 
B)  Fraud usually involves smaller amounts of money than robbery. 
C)  Fraud always involves deception, confidence and trickery where robbery is more violent and traumatic. 
D)  Organizational losses from fraud are less than losses from robbery. 
A)  Fraud is often less harmful than robbery because it affects fewer people. 
B)  Fraud usually involves smaller amounts of money than robbery. 
C)  Fraud always involves deception, confidence and trickery where robbery is more violent and traumatic. 
D)  Organizational losses from fraud are less than losses from robbery. C

Question 4

To be successful, plaintiffs in civil cases must prove their case by which of the following?

Accepted Answer

A)  Preponderance of evidence. 
B)  Beyond a reasonable doubt. 
C)  To a degree of reasonable mitigation. 
D)  To the standard of prima facie. 
A)  Preponderance of evidence. 
B)  Beyond a reasonable doubt. 
C)  To a degree of reasonable mitigation. 
D)  To the standard of prima facie.

Question 5

Which of the following is not a characteristic of management fraud:

Accepted Answer

A)  Top management deception 
B)  Manipulation of financial statements 
C)  Kickbacks or bribes 
D)  Pressure to earn year-end bonuses 
A)  Top management deception 
B)  Manipulation of financial statements 
C)  Kickbacks or bribes 
D)  Pressure to earn year-end bonuses

Question 6

In a Ponzi scheme, how is confidence in the perpetrator established?

Accepted Answer

A)  By obtaining a written note from an auditor that "validates" the services 
B)  By issuing notarized certificates 
C)  By initially paying returns on investments 
D)  Confidence does not need to be established for a Ponzi scheme to be successful 
A)  By obtaining a written note from an auditor that "validates" the services 
B)  By issuing notarized certificates 
C)  By initially paying returns on investments 
D)  Confidence does not need to be established for a Ponzi scheme to be successful

Question 7

What is the difference between civil and criminal prosecution as it relates to fraud ?

Accepted Answer

A)  They have a different purpose. 
B)  They have different burdens of proof. 
C)  Only civil prosecution can result in restitution and monetary payments 
D)  All of the above 
E)  A and B 
A)  They have a different purpose. 
B)  They have different burdens of proof. 
C)  Only civil prosecution can result in restitution and monetary payments 
D)  All of the above 
E)  A and B

Question 8

The most common fraud committed on behalf of an organization is:

Accepted Answer

A)  Vendor fraud 
B)  Employee embezzlement 
C)  Fraudulent financial reporting 
D)  Customer fraud 
A)  Vendor fraud 
B)  Employee embezzlement 
C)  Fraudulent financial reporting 
D)  Customer fraud

Question 9

The difference between fraud and error is:

Accepted Answer

A)  Fraud involves numbers 
B)  Fraud is found in business 
C)  Error can only be made by humans 
D)  Fraud involves intent 
A)  Fraud involves numbers 
B)  Fraud is found in business 
C)  Error can only be made by humans 
D)  Fraud involves intent

Question 10

Indirect fraud occurs when-

Accepted Answer

A)  Embezzled money is transferred to your relative's account 
B)  Misuse of company equipment ( i.e. surfing the web during work hours) 
C)  Receiving a kickback from a vendor 
D)  Paying for unapproved lunches with the company expense account. 
A)  Embezzled money is transferred to your relative's account 
B)  Misuse of company equipment ( i.e. surfing the web during work hours) 
C)  Receiving a kickback from a vendor 
D)  Paying for unapproved lunches with the company expense account.

Question 11

According to the text, what percentage of fraud perpetrators are caught?

Accepted Answer

A)  Only 5%-10% 
B)  15%-25% 
C)  40%-50% 
D)  It is impossible to know 
A)  Only 5%-10% 
B)  15%-25% 
C)  40%-50% 
D)  It is impossible to know

Question 12

In recent years, the size (in dollar amounts) of fraud cases has increased. Which of the following is NOT a reason for increase in the size of discovered frauds

Accepted Answer

A)  Complex accounting systems 
B)  It is no longer necessary to remove the physical assets 
C)  The advent of the internet 
D)  All of the above have contributed to an increase in the size of frauds 
A)  Complex accounting systems 
B)  It is no longer necessary to remove the physical assets 
C)  The advent of the internet 
D)  All of the above have contributed to an increase in the size of frauds

Question 13

Which of the following is not an example of a fraud-fighting career?

Accepted Answer

A)  Working for the criminal investigation division of the IRS. 
B)  Serving as an expert witness. 
C)  Maintaining the security of public records. 
D)  Defending an organization being sued in a civil case. 
A)  Working for the criminal investigation division of the IRS. 
B)  Serving as an expert witness. 
C)  Maintaining the security of public records. 
D)  Defending an organization being sued in a civil case.

Question 14

Which of the following is not an element of a Ponzi scheme?

Accepted Answer

A)  Gaining other's confidence. 
B)  Promising abnormally high returns. 
C)  Invested money is invested in high-risk government bonds. 
D)  Investment principle is partially used to make interest payments. 
A)  Gaining other's confidence. 
B)  Promising abnormally high returns. 
C)  Invested money is invested in high-risk government bonds. 
D)  Investment principle is partially used to make interest payments.

Question 15

Which of the following is not one of the important skills that a fraud-fighting professional should have as discussed in chapter 1:

Accepted Answer

A)  Researching skills 
B)  Communication skills 
C)  Technology skills 
D)  Analytical skills 
A)  Researching skills 
B)  Communication skills 
C)  Technology skills 
D)  Analytical skills

Question 16

The most common type of fraud committed on behalf of organizations is usually perpetrated by:

Accepted Answer

A)  Employees with access to company assets 
B)  Top management 
C)  Customers 
D)  Vendors 
A)  Employees with access to company assets 
B)  Top management 
C)  Customers 
D)  Vendors

Question 17

Vendor fraud can involve all of the following except:

Accepted Answer

A)  An overcharge for purchased goods 
B)  The shipment of inferior goods 
C)  Non-payment of goods by the customers 
D)  Non-shipment of goods even though payment has been made 
A)  An overcharge for purchased goods 
B)  The shipment of inferior goods 
C)  Non-payment of goods by the customers 
D)  Non-shipment of goods even though payment has been made

Question 18

Which of the following statements about criminal fraud and civil fraud is correct?

Accepted Answer

A)  The purpose of a criminal case is "to right a wrong". The purpose of civil case is to obtain a remedy. 
B)  Both criminal cases and civil cases require 12 jurors. 
C)  Both criminal cases and civil cases can require a fraud perpetrator to go to jail. 
D)  None of above. 
A)  The purpose of a criminal case is "to right a wrong". The purpose of civil case is to obtain a remedy. 
B)  Both criminal cases and civil cases require 12 jurors. 
C)  Both criminal cases and civil cases can require a fraud perpetrator to go to jail. 
D)  None of above.

Question 19

Which would most likely be a civil charge?

Accepted Answer

A)  Racketeering 
B)  Mail fraud 
C)  Defamation 
D)  Perjury 
A)  Racketeering 
B)  Mail fraud 
C)  Defamation 
D)  Perjury

Question 20

The elements of fraud include all of the following except:

Accepted Answer

A)  A material point is misrepresented 
B)  The misrepresentation is intentional 
C)  The misrepresentation is known to the victim 
D)  The victim must receive damage 
A)  A material point is misrepresented 
B)  The misrepresentation is intentional 
C)  The misrepresentation is known to the victim 
D)  The victim must receive damage

Which of the following is NOT considered fraud?

True or false: If a company experiences a $1,000 fraud, it will have to generate $1,000 in additional revenue to make up for the fraud.

Which of the following statements is most true?

To be successful, plaintiffs in civil cases must prove their case by which of the following?

Which of the following is not a characteristic of management fraud:

In a Ponzi scheme, how is confidence in the perpetrator established?

What is the difference between civil and criminal prosecution as it relates to fraud ?

The most common fraud committed on behalf of an organization is:

The difference between fraud and error is:

Indirect fraud occurs when-

According to the text, what percentage of fraud perpetrators are caught?

In recent years, the size (in dollar amounts) of fraud cases has increased. Which of the following is NOT a reason for increase in the size of discovered frauds

Which of the following is not an example of a fraud-fighting career?

Which of the following is not an element of a Ponzi scheme?

Which of the following is not one of the important skills that a fraud-fighting professional should have as discussed in chapter 1:

The most common type of fraud committed on behalf of organizations is usually perpetrated by:

Vendor fraud can involve all of the following except:

Which of the following statements about criminal fraud and civil fraud is correct?

Which would most likely be a civil charge?

The elements of fraud include all of the following except:

Why People Commit Fraud

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

Financial Statement Fraud

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

Fraud in E-Commerce

Legal Follow-Up

Filters

Exam 1: The Nature of Fraud

Which of the following is NOT considered fraud?

True or false: If a company experiences a $1,000 fraud, it will have to generate $1,000 in additional revenue to make up for the fraud.

Which of the following statements is most true?

To be successful, plaintiffs in civil cases must prove their case by which of the following?

Which of the following is not a characteristic of management fraud:

In a Ponzi scheme, how is confidence in the perpetrator established?

What is the difference between civil and criminal prosecution as it relates to fraud ?

The most common fraud committed on behalf of an organization is:

The difference between fraud and error is:

Indirect fraud occurs when-

According to the text, what percentage of fraud perpetrators are caught?

In recent years, the size (in dollar amounts) of fraud cases has increased. Which of the following is NOT a reason for increase in the size of discovered frauds

Which of the following is not an example of a fraud-fighting career?

Which of the following is not an element of a Ponzi scheme?

Which of the following is not one of the important skills that a fraud-fighting professional should have as discussed in chapter 1:

The most common type of fraud committed on behalf of organizations is usually perpetrated by:

Vendor fraud can involve all of the following except:

Which of the following statements about criminal fraud and civil fraud is correct?

Which would most likely be a civil charge?

The elements of fraud include all of the following except:

Why People Commit Fraud

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

Financial Statement Fraud

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

Fraud in E-Commerce

Legal Follow-Up

Filters