Exam 5: Fraud Examination and Fraud Management

A well-prepared interview conducted by a skilled interviewer can sometimes result in a confession that completely unwinds a complicated case.

Which of the following best describes the fraud scheme that involves an employee pocketing cash but not recording its collection?

________ ________ ________ occur when a dishonest purchasing agent purchases from a friend even though to do so is not in the best interest of the company.

Example of financial statement fraud red flags include

A signed confession is

Earnings management is always illegal and can never be justified by GAAP.

Type 2 errors result in unnecessary fraud investigations.

Evidence is collected in the following order:

Presented below is a list of terms relating to the different types of evidence and the evidence collection process,followed by definitions of those terms. Required: Match the letter next to each definition with the appropriate term.Each answer will be used only once. ________ 1.Observation ________ 2.Invigilation ________ 3.Surveillance ________ 4.Document examiners ________ 5.Search warrant ________ 6.Subpoena ________ 7.Predication ________ 8.Tracing ________ 9.Questioned document ________ 10.Vouching A.A widely accepted principle that requires that investigations be started or continued only when there is a reasonable basis to do so B.Following a source document that evidences a transaction through the entire accounting cycle C.The use of the senses to assess the behavior of persons and other activities such as business processes D.A court order that authorizes law enforcement to search for and seize evidence E.Surreptitious observation F.Document evidence whose authenticity or authorship is in question G.An order from a government agency or officer of a court that compels the recipient,under penalty,to produce physical evidence,documents,or testimony H.People who specialize in analyzing questioned documents I.Selecting numbers in accounts and following them backward in the accounting cycle to the source documents J.An observation technique that involves observing a suspect's behavior before,during,and after an announced investigation

________ ________ involves using chemicals to remove a check's payment details and then adding new details for the payee,date,or amount of payment.

The first question a fraud investigator should always ask is "why."

Which of the following is an example of revenue cycle fraud?

Stock option is an executive mechanism to prevent financial statement fraud.

Fraud examination and fraud investigation both refer to the application of accounting and other specialized skills to the prevention,detection,investigation,correction,and reporting of fraud.

Evidence should be collected in a specific order.

Calibration is the process of carefully observing a suspect's behavior

________ ________ ________ typically involves an employee pocketing cash but not recording its collection.

Total fraud cost is defined as the summation of costs of prevention,costs of investigations,costs of detections,and costs of losses.

Pulling the plug can defeat certain ________ techniques sometimes used by sophisticated fraudsters.

Hackers can hide their real IP addresses by using