Question 1

The most effective real-time analysis systems have all of the following characteristics except:

Accepted Answer

A)  Indicators are hard-coded into the system 
B)  They allow deletion of less-effective indicators 
C)  They allow real-time modifications to indicators 
D)  All of the above are used in the most effective systems. 
A)  Indicators are hard-coded into the system 
B)  They allow deletion of less-effective indicators 
C)  They allow real-time modifications to indicators 
D)  All of the above are used in the most effective systems.

Question 2

Benford's Law:

Accepted Answer

A)  Applies to numbers that have built-in limits 
B)  Is most effectively used with assigned numbers 
C)  Applies best to numbers that occur naturally 
D)  Uses ratios to detect frauds 
A)  Applies to numbers that have built-in limits 
B)  Is most effectively used with assigned numbers 
C)  Applies best to numbers that occur naturally 
D)  Uses ratios to detect frauds

Question 3

ACL is to a database as:

Accepted Answer

A)  Google is to the Internet 
B)  Monitor is to a computer 
C)  Phone number is to a Phone Company 
D)  None of the above 
A)  Google is to the Internet 
B)  Monitor is to a computer 
C)  Phone number is to a Phone Company 
D)  None of the above

Question 4

Which of the following is NOT a red flag for fraud committed by purchasing employees to purchase goods for personal use?

Accepted Answer

A)  Invoices without valid purchase order 
B)  Employee and vendor telephone numbers are the same 
C)  Invoices exceeding purchase order dollar amount ranked by dollar difference 
D)  Purchase orders with zero dollar amounts by buyer 
A)  Invoices without valid purchase order 
B)  Employee and vendor telephone numbers are the same 
C)  Invoices exceeding purchase order dollar amount ranked by dollar difference 
D)  Purchase orders with zero dollar amounts by buyer

Question 5

Which of the following illustrates the proactive approach to fraud detection?

Accepted Answer

A)  Using data-mining software to identify fraud 
B)  Using Benford's law to identify fraud 
C)  Locating accounting anomalies and investigating for possible fraud 
D)  Learning about the business or operations to be studied prior to investigating for fraud 
A)  Using data-mining software to identify fraud 
B)  Using Benford's law to identify fraud 
C)  Locating accounting anomalies and investigating for possible fraud 
D)  Learning about the business or operations to be studied prior to investigating for fraud

Question 6

All of the following must be converted to a change statement before it can be used effectively as a fraud detection tool except:

Accepted Answer

A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Cash flows 
D)  Two of the above 
A)  Balance Sheet 
B)  Income Statement 
C)  Statement of Cash flows 
D)  Two of the above

Question 7

__________ include statistical summaries of each column that include control totals, mean, maximum, standard deviation, number of zero values, number of empty records, etc.

Accepted Answer

A)  Descriptives 
B)  Descriptions 
C)  Headings 
D)  Captions 
A)  Descriptives 
B)  Descriptions 
C)  Headings 
D)  Captions

Question 8

Identify the true statement about detecting fraud through financial statements reports:

Accepted Answer

A)  To perform horizontal analysis, convert the financial statement balances to percentages of total assets or gross sales. 
B)  Vertical analysis is the most direct method of focusing on changes from period to period. 
C)  Before performing fraud analysis, all three types of financial statements need to be converted to change statements. 
D)  Small frauds usually do not significantly affect the financial statement balance. 
A)  To perform horizontal analysis, convert the financial statement balances to percentages of total assets or gross sales. 
B)  Vertical analysis is the most direct method of focusing on changes from period to period. 
C)  Before performing fraud analysis, all three types of financial statements need to be converted to change statements. 
D)  Small frauds usually do not significantly affect the financial statement balance.

Question 9

What is the major disadvantage of using the data-driven approach?

Accepted Answer

A)  More expensive than the traditional reactive approach 
B)  Limited when databases are large 
C)  Leads to excessive leads of possible frauds 
D)  None of the above 
A)  More expensive than the traditional reactive approach 
B)  Limited when databases are large 
C)  Leads to excessive leads of possible frauds 
D)  None of the above

Question 10

When a vendor takes control of a purchasing relationship, prices increase usually result from which kind of fraud?

Accepted Answer

A)  Asset fraud 
B)  Kiting 
C)  Management fraud 
D)  Kickback fraud 
A)  Asset fraud 
B)  Kiting 
C)  Management fraud 
D)  Kickback fraud

Question 11

In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. All of the following are possible explanations except:

Accepted Answer

A)  Inventory costs rose faster than sales prices. 
B)  Inventory is being stolen. 
C)  The accounting records are not accurate. 
D)  All of the above are possible explanations. 
A)  Inventory costs rose faster than sales prices. 
B)  Inventory is being stolen. 
C)  The accounting records are not accurate. 
D)  All of the above are possible explanations.

Question 12

Using these to detect fraud is much easier than assessing changes in the financial statement numbers themselves:

Accepted Answer

A)  Financial statement ratios 
B)  Vertical analyses 
C)  Horizontal analyses 
D)  Data mining 
A)  Financial statement ratios 
B)  Vertical analyses 
C)  Horizontal analyses 
D)  Data mining

Question 13

When identifying possible frauds that may exist, the auditor should ask all of the following questions except?

Accepted Answer

A)  Who are the key players in the business? 
B)  Does management demonstrate principles of integrity? 
C)  How could customers or vendors acting alone commit fraud? 
D)  What types of fraud have occurred or been suspected in the past? 
E)  All of the above are questions an auditor should ask. 
A)  Who are the key players in the business? 
B)  Does management demonstrate principles of integrity? 
C)  How could customers or vendors acting alone commit fraud? 
D)  What types of fraud have occurred or been suspected in the past? 
E)  All of the above are questions an auditor should ask.

Question 14

Digital analysis refers to:

Accepted Answer

A)  A predicted distribution pattern usually found in a random set of numbers 
B)  Benton's Law 
C)  Searching for expected relationships between numbers 
D)  All of the above 
A)  A predicted distribution pattern usually found in a random set of numbers 
B)  Benton's Law 
C)  Searching for expected relationships between numbers 
D)  All of the above

Question 15

Which of the following addresses is not a cross-correlation?

Accepted Answer

A)  853 South 900 E, Plymouth, Massachusetts, 05683-4583 
B)  853 S 900 E Plymouth, MA 05683 
C)  853 So. 900 Ea. Plymouth, M.A. 05683 
D)  853 South 900 E Plymouth, MA 05683 
A)  853 South 900 E, Plymouth, Massachusetts, 05683-4583 
B)  853 S 900 E Plymouth, MA 05683 
C)  853 So. 900 Ea. Plymouth, M.A. 05683 
D)  853 South 900 E Plymouth, MA 05683

The most effective real-time analysis systems have all of the following characteristics except:

Benford's Law:

ACL is to a database as:

Which of the following is NOT a red flag for fraud committed by purchasing employees to purchase goods for personal use?

Which of the following illustrates the proactive approach to fraud detection?

All of the following must be converted to a change statement before it can be used effectively as a fraud detection tool except:

__________ include statistical summaries of each column that include control totals, mean, maximum, standard deviation, number of zero values, number of empty records, etc.

Identify the true statement about detecting fraud through financial statements reports:

What is the major disadvantage of using the data-driven approach?

When a vendor takes control of a purchasing relationship, prices increase usually result from which kind of fraud?

In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. All of the following are possible explanations except:

Using these to detect fraud is much easier than assessing changes in the financial statement numbers themselves:

When identifying possible frauds that may exist, the auditor should ask all of the following questions except?

Digital analysis refers to:

Which of the following addresses is not a cross-correlation?

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

The most effective real-time analysis systems have all of the following characteristics except:

Benford's Law:

ACL is to a database as:

Which of the following is NOT a red flag for fraud committed by purchasing employees to purchase goods for personal use?

Which of the following illustrates the proactive approach to fraud detection?

All of the following must be converted to a change statement before it can be used effectively as a fraud detection tool except:

__________ include statistical summaries of each column that include control totals, mean, maximum, standard deviation, number of zero values, number of empty records, etc.

Identify the true statement about detecting fraud through financial statements reports:

What is the major disadvantage of using the data-driven approach?

When a vendor takes control of a purchasing relationship, prices increase usually result from which kind of fraud?

In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. All of the following are possible explanations except:

Using these to detect fraud is much easier than assessing changes in the financial statement numbers themselves:

When identifying possible frauds that may exist, the auditor should ask all of the following questions except?

Digital analysis refers to:

Which of the following addresses is not a cross-correlation?

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