Question 1

Which of the following entries are not common symptoms of fraud?

Accepted Answer

A)  Journal entries made near the end of an accounting period 
B)  Journal entries without documentary support 
C)  Journal entries that do not balance 
D)  All of the above are common symptoms of fraud. 
A)  Journal entries made near the end of an accounting period 
B)  Journal entries without documentary support 
C)  Journal entries that do not balance 
D)  All of the above are common symptoms of fraud.

Question 2

Which of the following is not an advantage to increasing expenses to conceal a fraud:

Accepted Answer

A)  By increasing expenses, the accounting equation often remains in balance. 
B)  Expenses are closed or brought to zero balances at year-end, thus obscuring the audit trail. 
C)  Recording such an expense involves a fictitious journal entry that generally doesn't have much documentary support to it. 
D)  Increasing expenses is much easier than decreasing liabilities or revenues, both of which would quickly draw attention from vendors or management. 
A)  By increasing expenses, the accounting equation often remains in balance. 
B)  Expenses are closed or brought to zero balances at year-end, thus obscuring the audit trail. 
C)  Recording such an expense involves a fictitious journal entry that generally doesn't have much documentary support to it. 
D)  Increasing expenses is much easier than decreasing liabilities or revenues, both of which would quickly draw attention from vendors or management.

Question 3

Internal control weaknesses that make fraud easier to commit include:

Accepted Answer

A)  Lack of independent checks 
B)  Overriding of existing controls 
C)  Lack of segregation of duties 
D)  All of the above 
A)  Lack of independent checks 
B)  Overriding of existing controls 
C)  Lack of segregation of duties 
D)  All of the above

Question 4

Smart embezzlers realize that when making false journal entries, reducing _____________ is not a good concealment method?

Accepted Answer

A)  Time spent at work 
B)  Liabilities 
C)  Management interaction 
D)  Time spent making a journal entry 
A)  Time spent at work 
B)  Liabilities 
C)  Management interaction 
D)  Time spent making a journal entry

Question 5

Inaccuracies in ledgers are what type of fraud symptom?

Accepted Answer

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

Question 6

Who is in the best position to detect employee fraud?

Accepted Answer

A)  Auditors 
B)  Senior Management 
C)  Co-workers 
D)  All of the above 
A)  Auditors 
B)  Senior Management 
C)  Co-workers 
D)  All of the above

Question 7

In investigating fraud auditors should NOT

Accepted Answer

A)  Collect documents supporting journal entries without questioning content 
B)  Understand business processes of the companies 
C)  Allow management to select samples of documents to analyze 
D)  Check all accounting entries made at year-end 
A)  Collect documents supporting journal entries without questioning content 
B)  Understand business processes of the companies 
C)  Allow management to select samples of documents to analyze 
D)  Check all accounting entries made at year-end

Question 8

Strange financial statement relationships that are examples of analytical anomalies include all of the following except:

Accepted Answer

A)  Increased revenues with decreased inventory. 
B)  Increased revenues with increased cash flows. 
C)  Increased revenues with decreased receivables. 
D)  Increased inventory with decreased payables. 
A)  Increased revenues with decreased inventory. 
B)  Increased revenues with increased cash flows. 
C)  Increased revenues with decreased receivables. 
D)  Increased inventory with decreased payables.

Question 9

All but which of the following is an internal control weakness?

Accepted Answer

A)  Lack of segregation of duties 
B)  Lack of physical safeguards 
C)  Lack of proper authorization 
D)  A and C 
E)  All of the above 
A)  Lack of segregation of duties 
B)  Lack of physical safeguards 
C)  Lack of proper authorization 
D)  A and C 
E)  All of the above

Question 10

In relation to fraud, mandating employee vacations of one week or longer annually is effective because:

Accepted Answer

A)  Employees who work too hard usually burn out and fraud is committed when people are tired and not thinking clearly 
B)  If people don't take vacations they will feel underappreciated and think the company "owes them" 
C)  When fraudulent employees take a leave, their work usually must be performed by others and the fraud is more easily detected 
D)  None of the above 
A)  Employees who work too hard usually burn out and fraud is committed when people are tired and not thinking clearly 
B)  If people don't take vacations they will feel underappreciated and think the company "owes them" 
C)  When fraudulent employees take a leave, their work usually must be performed by others and the fraud is more easily detected 
D)  None of the above

Question 11

Which of the following statements is FALSE?

Accepted Answer

A)  A study showed that only 25% of embezzlers who were caught claimed to have used the money to save for retirement. 
B)  People who can delay gratification rarely embezzle from their employers. 
C)  Although evidence of lifestyle changes alone is not complete proof of embezzlement, this type of evidence is easy to corroborate. 
D)  Once fraud perpetrators meet their current financial needs, they often embezzle more in order to support a more expensive lifestyle. 
A)  A study showed that only 25% of embezzlers who were caught claimed to have used the money to save for retirement. 
B)  People who can delay gratification rarely embezzle from their employers. 
C)  Although evidence of lifestyle changes alone is not complete proof of embezzlement, this type of evidence is easy to corroborate. 
D)  Once fraud perpetrators meet their current financial needs, they often embezzle more in order to support a more expensive lifestyle.

Question 12

___________ are often in the worst position to detect fraud.

Accepted Answer

A)  Auditors 
B)  Co-workers 
C)  Managers 
D)  Company accountants 
E)  Friends 
A)  Auditors 
B)  Co-workers 
C)  Managers 
D)  Company accountants 
E)  Friends

Question 13

Which of the following is an analytical anomaly that could be related to fraud?

Accepted Answer

A)  Journal entries that lack documentation 
B)  Late charges that are incurred on Accounts Payable 
C)  Increased scrap 
D)  The fraud perpetrator increases his smoking habit 
A)  Journal entries that lack documentation 
B)  Late charges that are incurred on Accounts Payable 
C)  Increased scrap 
D)  The fraud perpetrator increases his smoking habit

Question 14

The auditors' main goal of matching documents is to:

Accepted Answer

A)  Determine whether support exists and is adequate 
B)  Determine whether the documents are real or fraudulent 
C)  Determine whether the expenditures make sense 
D)  Determine whether all aspects of the documentation are in order 
A)  Determine whether support exists and is adequate 
B)  Determine whether the documents are real or fraudulent 
C)  Determine whether the expenditures make sense 
D)  Determine whether all aspects of the documentation are in order

Question 15

Which of the following are typical behaviors of first-time fraud perpetrators?

Accepted Answer

A)  Constantly nervous 
B)  Easily irritated 
C)  Is boisterous 
D)  All of the above 
A)  Constantly nervous 
B)  Easily irritated 
C)  Is boisterous 
D)  All of the above

Question 16

Which of the following is an analytical anomaly?

Accepted Answer

A)  Increases in past due Accounts Receivable 
B)  Significant increases or decreases in account balances 
C)  Alterations on documents 
D)  Excessive voids or credits 
A)  Increases in past due Accounts Receivable 
B)  Significant increases or decreases in account balances 
C)  Alterations on documents 
D)  Excessive voids or credits

Question 17

Which of the following fraud symptoms is usually the easiest to detect?

Accepted Answer

A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Lifestyle changes 
D)  Analytical anomalies 
A)  Accounting anomalies 
B)  Internal control weaknesses 
C)  Lifestyle changes 
D)  Analytical anomalies

Question 18

People who can delay gratification rarely embezzle.

Accepted Answer

A) True 
 B)False

Question 19

Because of the nature of fraud, auditors are often in the worse position to detect it. However, auditors are frequently key in detecting fraud in which one of the following elements of fraud?

Accepted Answer

A)  Theft 
B)  Concealment 
C)  Conversion 
D)  Collusion 
A)  Theft 
B)  Concealment 
C)  Conversion 
D)  Collusion

Question 20

It is discovered that a bank does not require two signatures on cashier's checks exceeding $500,000. This is an example of:

Accepted Answer

A)  Analytical anomalies. 
B)  Accounting anomalies. 
C)  Faulty journal entries. 
D)  Internal control weaknesses. 
A)  Analytical anomalies. 
B)  Accounting anomalies. 
C)  Faulty journal entries. 
D)  Internal control weaknesses.

Which of the following entries are not common symptoms of fraud?

Which of the following is not an advantage to increasing expenses to conceal a fraud:

Internal control weaknesses that make fraud easier to commit include:

Smart embezzlers realize that when making false journal entries, reducing _____________ is not a good concealment method?

Inaccuracies in ledgers are what type of fraud symptom?

Who is in the best position to detect employee fraud?

In investigating fraud auditors should NOT

Strange financial statement relationships that are examples of analytical anomalies include all of the following except:

All but which of the following is an internal control weakness?

In relation to fraud, mandating employee vacations of one week or longer annually is effective because:

Which of the following statements is FALSE?

___________ are often in the worst position to detect fraud.

Which of the following is an analytical anomaly that could be related to fraud?

The auditors' main goal of matching documents is to:

Which of the following are typical behaviors of first-time fraud perpetrators?

Which of the following is an analytical anomaly?

Which of the following fraud symptoms is usually the easiest to detect?

People who can delay gratification rarely embezzle.

Because of the nature of fraud, auditors are often in the worse position to detect it. However, auditors are frequently key in detecting fraud in which one of the following elements of fraud?

It is discovered that a bank does not require two signatures on cashier's checks exceeding $500,000. This is an example of:

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

Which of the following entries are not common symptoms of fraud?

Which of the following is not an advantage to increasing expenses to conceal a fraud:

Internal control weaknesses that make fraud easier to commit include:

Smart embezzlers realize that when making false journal entries, reducing _____________ is not a good concealment method?

Inaccuracies in ledgers are what type of fraud symptom?

Who is in the best position to detect employee fraud?

In investigating fraud auditors should NOT

Strange financial statement relationships that are examples of analytical anomalies include all of the following except:

All but which of the following is an internal control weakness?

In relation to fraud, mandating employee vacations of one week or longer annually is effective because:

Which of the following statements is FALSE?

___________ are often in the worst position to detect fraud.

Which of the following is an analytical anomaly that could be related to fraud?

The auditors' main goal of matching documents is to:

Which of the following are typical behaviors of first-time fraud perpetrators?

Which of the following is an analytical anomaly?

Which of the following fraud symptoms is usually the easiest to detect?

People who can delay gratification rarely embezzle.

Because of the nature of fraud, auditors are often in the worse position to detect it. However, auditors are frequently key in detecting fraud in which one of the following elements of fraud?

It is discovered that a bank does not require two signatures on cashier's checks exceeding $500,000. This is an example of:

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