Question 1

Increased scrap is an example of

Accepted Answer

A)  An accounting anomaly 
B)  An internal control weakness 
C)  An analytical anomaly 
D)  None of the above 
A)  An accounting anomaly 
B)  An internal control weakness 
C)  An analytical anomaly 
D)  None of the above C

Question 2

An employee decides to steal cash from his/her employer. What is the most common way this employee would conceal any amount taken?

Accepted Answer

A)  Record the exiting cash as legal expense 
B)  Writing down accounts payable for a supplier 
C)  Increasing accounts receivable for a customer 
D)  Writing down retained earnings 
A)  Record the exiting cash as legal expense 
B)  Writing down accounts payable for a supplier 
C)  Increasing accounts receivable for a customer 
D)  Writing down retained earnings A

Question 3

Steps taken by the perpetrator to hide the fraud are called:

Accepted Answer

A)  theft act 
B)  concealment efforts 
C)  conversion efforts 
D)  invigilation 
A)  theft act 
B)  concealment efforts 
C)  conversion efforts 
D)  invigilation B

Question 4

Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by ________ and __________?

Accepted Answer

A)  Guilt and fear. 
B)  Stress and insomnia. 
C)  Confidence and rationalization. 
D)  Defensiveness and guilt. 
A)  Guilt and fear. 
B)  Stress and insomnia. 
C)  Confidence and rationalization. 
D)  Defensiveness and guilt.

Question 5

Which of the following is NOT a "strange" financial statement relationship?

Accepted Answer

A)  Increased revenues with decreased inventory 
B)  Increased revenues with decreased receivables 
C)  Decreased inventory with decreased payables 
D)  Decreased volume with decreased cost per unit 
A)  Increased revenues with decreased inventory 
B)  Increased revenues with decreased receivables 
C)  Decreased inventory with decreased payables 
D)  Decreased volume with decreased cost per unit

Question 6

While reviewing the company's financial records at year-end John notices two interesting facts, 1) the trial balance does not balance, 2) more entries were made in the first half of the year than the last. Which are large red flags of fraud?

Accepted Answer

A)  1 
B)  2 
C)  1 and 2 
D)  Neither 
A)  1 
B)  2 
C)  1 and 2 
D)  Neither

Question 7

Which of the following best characterizes someone committing fraud?

Accepted Answer

A)  Lavish life style 
B)  Work-aholic 
C)  Stressed and irritable 
D)  All of the above 
A)  Lavish life style 
B)  Work-aholic 
C)  Stressed and irritable 
D)  All of the above

Question 8

A faulty journal entry is an example of which kind of fraud symptom?

Accepted Answer

A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Unusual behaviors 
D)  Analytical anomalies 
A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Unusual behaviors 
D)  Analytical anomalies

Question 9

Which of the following is not a coping symptom associated with stress caused by fear and guilt?

Accepted Answer

A)  Sweating 
B)  Unusual belligerence in stating opinions 
C)  Inability to look people in the eye 
D)  All of the above could be coping symptoms 
A)  Sweating 
B)  Unusual belligerence in stating opinions 
C)  Inability to look people in the eye 
D)  All of the above could be coping symptoms

Question 10

An insurance company received claim forms from 22 phony doctors. The forms all originated from two addresses: a post office box and a business located in a nearby city and owned by the manager's husband. The manager used a limousine to pick up fellow employees from an expensive restaurant. What fraud symptoms are mentioned in this scenario?

Accepted Answer

A)  Accounting anomalies 
B)  Extravagant lifestyles 
C)  Internal control weaknesses 
D)  Both a and b 
E)  All of the above 
A)  Accounting anomalies 
B)  Extravagant lifestyles 
C)  Internal control weaknesses 
D)  Both a and b 
E)  All of the above

Question 11

Which of the following is NOT true regarding the fraud symptom of unusual behavior?

Accepted Answer

A)  No particular behavior necessarily signals fraud 
B)  Fear and guilt causes stress, which then brings about unusual behaviors 
C)  Psychopaths and sociopaths can and do pass polygraph tests with ease 
D)  Changes in behavior are weak signals of fraud 
A)  No particular behavior necessarily signals fraud 
B)  Fear and guilt causes stress, which then brings about unusual behaviors 
C)  Psychopaths and sociopaths can and do pass polygraph tests with ease 
D)  Changes in behavior are weak signals of fraud

Question 12

Which of the following is NOT a reason why most employees and others don't come forward with their suspicions or knowledge of fraud?

Accepted Answer

A)  Knowing for certain that fraud is taking place is common, but many employees don't believe it's their responsibility to come forward 
B)  Heard the horror stories about what often happens to whistle-blowers 
C)  Organizations don't make it easy 
D)  People have been conditioned to believe that whistle-blowing is not acceptable 
A)  Knowing for certain that fraud is taking place is common, but many employees don't believe it's their responsibility to come forward 
B)  Heard the horror stories about what often happens to whistle-blowers 
C)  Organizations don't make it easy 
D)  People have been conditioned to believe that whistle-blowing is not acceptable

Question 13

Which of the following is not one of the six symptoms of fraud?

Accepted Answer

A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Extravagant lifestyles 
D)  Unusual behavior 
E)  None of the above 
A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Extravagant lifestyles 
D)  Unusual behavior 
E)  None of the above

Question 14

Analytical anomalies include all of the following except which of the following?

Accepted Answer

A)  Consistent cash shortages 
B)  Bottlenecks in inventory 
C)  Excess purchases 
D)  Unreasonably high expenses 
A)  Consistent cash shortages 
B)  Bottlenecks in inventory 
C)  Excess purchases 
D)  Unreasonably high expenses

Question 15

An auditor noticed that Company B had an increase in sales and a large decrease in inventory and A/R balances. This may be which type of a fraud symptom?

Accepted Answer

A)  Accounting anomaly 
B)  Internal control weakness 
C)  Analytical anomaly 
D)  Unusual behavior 
A)  Accounting anomaly 
B)  Internal control weakness 
C)  Analytical anomaly 
D)  Unusual behavior

Question 16

Auditors usually detect fraud in which element of the crime?

Accepted Answer

A)  Theft act 
B)  Concealment 
C)  Conversion 
D)  Rationalization 
A)  Theft act 
B)  Concealment 
C)  Conversion 
D)  Rationalization

Question 17

One of the most effective ways to prevent fraud is to implement a system of independent checks. Which of the following is not a common independent check?

Accepted Answer

A)  Employee Transfers 
B)  Audits 
C)  Mandatory vacations 
D)  Surveillance 
A)  Employee Transfers 
B)  Audits 
C)  Mandatory vacations 
D)  Surveillance

Question 18

Which of the following is not a symptom of fraud?

Accepted Answer

A)  Extravagant lifestyles 
B)  Accounting anomalies 
C)  Employees taking extra vacation time 
D)  All of above are symptoms of fraud 
A)  Extravagant lifestyles 
B)  Accounting anomalies 
C)  Employees taking extra vacation time 
D)  All of above are symptoms of fraud

Question 19

Which of the following is an example of an analytical anomaly?

Accepted Answer

A)  Excessive late charges 
B)  Unexplained inventory shortages 
C)  Too many debit memos 
D)  All of the above 
A)  Excessive late charges 
B)  Unexplained inventory shortages 
C)  Too many debit memos 
D)  All of the above

Question 20

Which of the following is a problem related to the segregation of duties?

Accepted Answer

A)  Julie both writes expense checks and takes customers' cash 
B)  Bob both orders office supplies and orders company checks 
C)  Steve both records receivables and can write off bad accounts 
D)  Rebecca both types memos and orders lunch 
A)  Julie both writes expense checks and takes customers' cash 
B)  Bob both orders office supplies and orders company checks 
C)  Steve both records receivables and can write off bad accounts 
D)  Rebecca both types memos and orders lunch

Increased scrap is an example of

An employee decides to steal cash from his/her employer. What is the most common way this employee would conceal any amount taken?

Steps taken by the perpetrator to hide the fraud are called:

Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by and __?

Which of the following is NOT a "strange" financial statement relationship?

While reviewing the company's financial records at year-end John notices two interesting facts, 1) the trial balance does not balance, 2) more entries were made in the first half of the year than the last. Which are large red flags of fraud?

Which of the following best characterizes someone committing fraud?

A faulty journal entry is an example of which kind of fraud symptom?

Which of the following is not a coping symptom associated with stress caused by fear and guilt?

Which of the following is NOT true regarding the fraud symptom of unusual behavior?

Which of the following is NOT a reason why most employees and others don't come forward with their suspicions or knowledge of fraud?

Which of the following is not one of the six symptoms of fraud?

Analytical anomalies include all of the following except which of the following?

An auditor noticed that Company B had an increase in sales and a large decrease in inventory and A/R balances. This may be which type of a fraud symptom?

Auditors usually detect fraud in which element of the crime?

One of the most effective ways to prevent fraud is to implement a system of independent checks. Which of the following is not a common independent check?

Which of the following is not a symptom of fraud?

Which of the following is an example of an analytical anomaly?

Which of the following is a problem related to the segregation of duties?

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: An Overview

Preventing 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 5: Recognizing the Symptoms of Fraud

Increased scrap is an example of

An employee decides to steal cash from his/her employer. What is the most common way this employee would conceal any amount taken?

Steps taken by the perpetrator to hide the fraud are called:

Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by ________ and __________?

Which of the following is NOT a "strange" financial statement relationship?

While reviewing the company's financial records at year-end John notices two interesting facts, 1) the trial balance does not balance, 2) more entries were made in the first half of the year than the last. Which are large red flags of fraud?

Which of the following best characterizes someone committing fraud?

A faulty journal entry is an example of which kind of fraud symptom?

Which of the following is not a coping symptom associated with stress caused by fear and guilt?

Which of the following is NOT true regarding the fraud symptom of unusual behavior?

Which of the following is NOT a reason why most employees and others don't come forward with their suspicions or knowledge of fraud?

Which of the following is not one of the six symptoms of fraud?

Analytical anomalies include all of the following except which of the following?

An auditor noticed that Company B had an increase in sales and a large decrease in inventory and A/R balances. This may be which type of a fraud symptom?

Auditors usually detect fraud in which element of the crime?

One of the most effective ways to prevent fraud is to implement a system of independent checks. Which of the following is not a common independent check?

Which of the following is not a symptom of fraud?

Which of the following is an example of an analytical anomaly?

Which of the following is a problem related to the segregation of duties?

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: An Overview

Preventing 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

Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by and __?