Question 1

Which of the following is not a step in the deductive fraud detection approach?

Accepted Answer

A)  Understanding the business or operations to be studied 
B)  Understanding what kinds of frauds could occur 
C)  Determining the most likely symptoms 
D)  Performing digital analysis of company databases 
E)  Gathering data about symptoms 
A)  Understanding the business or operations to be studied 
B)  Understanding what kinds of frauds could occur 
C)  Determining the most likely symptoms 
D)  Performing digital analysis of company databases 
E)  Gathering data about symptoms D

Question 2

Each of the following is true about Benford's Law except:

Accepted Answer

A)  Benford's law broadly identifies the possible existence of fraud, but does not identify promising leads. 
B)  Benford's law states that each digit (from 1 to 9) will be the first digit in a number approximately the same amount of times as every other digit. 
C)  A major advantage of using Benford's law to detect fraud is that it is the least expensive method to implement and use. 
D)  Fraud perpetrators are less likely to learn that you are analyzing data according to Benford's law because it does not involve extensive data mining queries. 
A)  Benford's law broadly identifies the possible existence of fraud, but does not identify promising leads. 
B)  Benford's law states that each digit (from 1 to 9) will be the first digit in a number approximately the same amount of times as every other digit. 
C)  A major advantage of using Benford's law to detect fraud is that it is the least expensive method to implement and use. 
D)  Fraud perpetrators are less likely to learn that you are analyzing data according to Benford's law because it does not involve extensive data mining queries. B

Question 3

Which statement is false?

Accepted Answer

A)  In recent years there have been many cases of financial statement fraud. 
B)  Proactive fraud detection methods are in their infancy. 
C)  Fraud investigation involves identifying symptoms that often indicate fraud is being or has been committed. 
D)  Fraud investigation involves determining who committed the fraud, the schemes used and how much money or assets were taken. 
A)  In recent years there have been many cases of financial statement fraud. 
B)  Proactive fraud detection methods are in their infancy. 
C)  Fraud investigation involves identifying symptoms that often indicate fraud is being or has been committed. 
D)  Fraud investigation involves determining who committed the fraud, the schemes used and how much money or assets were taken. C

Question 4

All of the following are symptoms of vendor fraud except:

Accepted Answer

A)  Short shipping 
B)  Billing for goods not ordered or shipped 
C)  Providing poor quality goods 
D)  All of the above are symptoms of vendor fraud 
A)  Short shipping 
B)  Billing for goods not ordered or shipped 
C)  Providing poor quality goods 
D)  All of the above are symptoms of vendor fraud

Question 5

Which of the following is the least effective way to compare financial statements from one period to the next when searching for anomalies?

Accepted Answer

A)  Comparing account balances in the statements from one period to the next 
B)  Calculating key ratios and comparing them from one period to the next 
C)  Performing horizontal analysis 
D)  Performing vertical analysis 
A)  Comparing account balances in the statements from one period to the next 
B)  Calculating key ratios and comparing them from one period to the next 
C)  Performing horizontal analysis 
D)  Performing vertical analysis

Question 6

Which is not one of the steps in the Proactive Fraud Detection process?

Accepted Answer

A)  Determine if actual fraud or other factors are causing the symptoms 
B)  Understanding the business or operations to be studied 
C)  Use databases and information systems to identify the fraud 
D)  Understanding what kinds of frauds could occur (fraud exposures) in the operation 
A)  Determine if actual fraud or other factors are causing the symptoms 
B)  Understanding the business or operations to be studied 
C)  Use databases and information systems to identify the fraud 
D)  Understanding what kinds of frauds could occur (fraud exposures) in the operation

Question 7

A Matasos matrix allows a user to combine different indicators to different schemes.

Accepted Answer

A) True 
 B)False

Question 8

Sampling is an effective analysis procedure for finding _________:

Accepted Answer

A)  Routine accounting anomalies 
B)  Fraud 
C)  All of the above 
D)  None of the above 
A)  Routine accounting anomalies 
B)  Fraud 
C)  All of the above 
D)  None of the above

Question 9

In a data-driven investigation, putting yourself in the shoes of a criminal would be an example of what step?

Accepted Answer

A)  Identify possible frauds that could exist 
B)  Investigate symptoms 
C)  Use technology to gather data 
D)  Understanding the business 
A)  Identify possible frauds that could exist 
B)  Investigate symptoms 
C)  Use technology to gather data 
D)  Understanding the business

Question 10

True or false: Spreadsheets are not very useful in analyzing large amounts of data.

Accepted Answer

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

Question 11

All of the following are red flags of the existence of kickbacks except:

Accepted Answer

A)  The purchaser gains greater control over the vendor 
B)  Prices increase 
C)  Volume with the kickback vendor increases 
D)  Quality from the kickback vendor decreases 
E)  All of the above are red flags of the existence of kickbacks 
A)  The purchaser gains greater control over the vendor 
B)  Prices increase 
C)  Volume with the kickback vendor increases 
D)  Quality from the kickback vendor decreases 
E)  All of the above are red flags of the existence of kickbacks

Question 12

Which of the following types of software is commercial data-mining software?

Accepted Answer

A)  Audit command language (ACL) 
B)  QuickBooks 
C)  Peachtree 
D)  Excel 
A)  Audit command language (ACL) 
B)  QuickBooks 
C)  Peachtree 
D)  Excel

Question 13

The data-driven method of fraud detection does not include which of the following characteristics:

Accepted Answer

A)  Determining symptoms that the most likely frauds would generate 
B)  Understanding the business 
C)  Understanding and using Benford's law to analyze company databases 
D)  Understanding what kinds of frauds could occur 
A)  Determining symptoms that the most likely frauds would generate 
B)  Understanding the business 
C)  Understanding and using Benford's law to analyze company databases 
D)  Understanding what kinds of frauds could occur

Question 14

An appropriate red flag search to detect kickbacks or other favors would include

Accepted Answer

A)  Invoices without valid purchase order 
B)  Employee and vendor telephone numbers are the same 
C)  Purchase orders with zero dollar amounts by buyer 
D)  Price increases greater than 30% for four consecutive years 
A)  Invoices without valid purchase order 
B)  Employee and vendor telephone numbers are the same 
C)  Purchase orders with zero dollar amounts by buyer 
D)  Price increases greater than 30% for four consecutive years

Question 15

One of the major disadvantages of Benford's law in detecting fraud is:

Accepted Answer

A)  You know exactly what you are looking for. 
B)  It is a fairly expensive method to use. 
C)  You have enormous amounts of information to sift through. 
D)  It only broadly identifies the possible existence of fraud and can include non-fraud factors. 
A)  You know exactly what you are looking for. 
B)  It is a fairly expensive method to use. 
C)  You have enormous amounts of information to sift through. 
D)  It only broadly identifies the possible existence of fraud and can include non-fraud factors.

Question 16

Horizontal analysis is performed when:

Accepted Answer

A)  Total assets are set at 100% and all other balances are a percentage of total assets 
B)  The percentage change in the balance sheet and income statement numbers is computed for one period to the next 
C)  Calculating and comparing key ratios from period to period 
D)  Comparing account balances in the statements from one period to the next 
A)  Total assets are set at 100% and all other balances are a percentage of total assets 
B)  The percentage change in the balance sheet and income statement numbers is computed for one period to the next 
C)  Calculating and comparing key ratios from period to period 
D)  Comparing account balances in the statements from one period to the next

Question 17

Which of the following is the most direct method of focusing on changes in a company's balance sheet and income statement?

Accepted Answer

A)  Comparing key ratios from one period to the next 
B)  Comparing account balances from one period to the next 
C)  Vertical analysis 
D)  Horizontal analysis 
A)  Comparing key ratios from one period to the next 
B)  Comparing account balances from one period to the next 
C)  Vertical analysis 
D)  Horizontal analysis

Question 18

When using financial statement analysis, which ratio will be most useful in assessing a company's operational efficiency?

Accepted Answer

A)  Inventory turnover 
B)  Quick ratio 
C)  Cost of goods sold percentage 
D)  Current Ratio 
A)  Inventory turnover 
B)  Quick ratio 
C)  Cost of goods sold percentage 
D)  Current Ratio

Question 19

Which of the following is the most direct approach to focusing on changes in the balance sheet from one period to the next?

Accepted Answer

A)  Vertical Analysis 
B)  Horizontal Analysis 
C)  Ratio Analysis 
D)  None of the above 
A)  Vertical Analysis 
B)  Horizontal Analysis 
C)  Ratio Analysis 
D)  None of the above

Question 20

The quick ratio is calculated as:

Accepted Answer

A)  Current assets/Current Liabilities 
B)  Current Assets (minus Inventory)/Current Liabilities 
C)  Net Income/ Net Sales 
D)  Inventory/Total Assets 
A)  Current assets/Current Liabilities 
B)  Current Assets (minus Inventory)/Current Liabilities 
C)  Net Income/ Net Sales 
D)  Inventory/Total Assets

Which of the following is not a step in the deductive fraud detection approach?

Each of the following is true about Benford's Law except:

Which statement is false?

All of the following are symptoms of vendor fraud except:

Which of the following is the least effective way to compare financial statements from one period to the next when searching for anomalies?

Which is not one of the steps in the Proactive Fraud Detection process?

A Matasos matrix allows a user to combine different indicators to different schemes.

Sampling is an effective analysis procedure for finding _________:

In a data-driven investigation, putting yourself in the shoes of a criminal would be an example of what step?

True or false: Spreadsheets are not very useful in analyzing large amounts of data.

All of the following are red flags of the existence of kickbacks except:

Which of the following types of software is commercial data-mining software?

The data-driven method of fraud detection does not include which of the following characteristics:

An appropriate red flag search to detect kickbacks or other favors would include

One of the major disadvantages of Benford's law in detecting fraud is:

Horizontal analysis is performed when:

Which of the following is the most direct method of focusing on changes in a company's balance sheet and income statement?

When using financial statement analysis, which ratio will be most useful in assessing a company's operational efficiency?

Which of the following is the most direct approach to focusing on changes in the balance sheet from one period to the next?

The quick ratio is calculated as:

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: An Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

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 6: Data-Driven Fraud Detection

Which of the following is not a step in the deductive fraud detection approach?

Each of the following is true about Benford's Law except:

Which statement is false?

All of the following are symptoms of vendor fraud except:

Which of the following is the least effective way to compare financial statements from one period to the next when searching for anomalies?

Which is not one of the steps in the Proactive Fraud Detection process?

A Matasos matrix allows a user to combine different indicators to different schemes.

Sampling is an effective analysis procedure for finding _________:

In a data-driven investigation, putting yourself in the shoes of a criminal would be an example of what step?

True or false: Spreadsheets are not very useful in analyzing large amounts of data.

All of the following are red flags of the existence of kickbacks except:

Which of the following types of software is commercial data-mining software?

The data-driven method of fraud detection does not include which of the following characteristics:

An appropriate red flag search to detect kickbacks or other favors would include

One of the major disadvantages of Benford's law in detecting fraud is:

Horizontal analysis is performed when:

Which of the following is the most direct method of focusing on changes in a company's balance sheet and income statement?

When using financial statement analysis, which ratio will be most useful in assessing a company's operational efficiency?

Which of the following is the most direct approach to focusing on changes in the balance sheet from one period to the next?

The quick ratio is calculated as:

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: An Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

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