Question 1

Describe the factors that constitute the fraud triangle.Why is it important to auditors?

Accepted Answer

The fraud triangle consists of three factors that contribute to or are associated with management and employee fraud.These are:
(1)situational pressure,which includes personal or job-related stresses that could coerce an individual to act dishonestly;
(2)opportunity,which involves direct access to assets and/or access to information that controls assets,and;
(3)ethics,which pertains to one's character and degree of moral opposition to acts of dishonesty.
An individual with a high level of personal ethics,who is confronted by low pressure and limited opportunity to commit fraud,is more likely to behave honestly than one with weaker personal ethics,who is under high pressure and exposed to greater fraud opportunities.
Research by forensic experts and academics has shown that the auditor's evaluation of fraud is enhanced when the fraud triangle factors are considered.

Question 2

Business ethics involves

Accepted Answer

A) how managers decide on what is right in conducting business 
B) how managers achieve what they decide is right for the business 
C) both a and b 
D) none of the above 
A) how managers decide on what is right in conducting business 
B) how managers achieve what they decide is right for the business 
C) both a and b 
D) none of the above C

Question 3

Which of the following is not part of the COSO framework?

Accepted Answer

A) monitoring 
B) risk assessment 
C) certification by management 
D) control activities 
A) monitoring 
B) risk assessment 
C) certification by management 
D) control activities C

Question 4

Skimming involves stealing cash from an organization after it is recorded on the organization's books and records.

Accepted Answer

A) True 
 B)False

Question 5

The text describes six internal control activities.List four of them and provide a specific example of each one.

Accepted Answer

The answer of The text describes six internal control activities.List...

Question 6

Opportunity involves direct access to assets and/or access to information that controls assets.

Accepted Answer

A) True 
 B)False

Question 7

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Accepted Answer

A) preventive control 
B) detective control 
C) corrective control 
D) none of the above 
A) preventive control 
B) detective control 
C) corrective control 
D) none of the above

Question 8

Four underlying problems that called pre-SOX federal security law adequacy into question were addressed in the text.Discuss two of these problems.

Accepted Answer

Lack of auditor independence-Auditing fi

Question 9

Ethical issues and legal issues are essentially the same.

Accepted Answer

A) True 
 B)False

Question 10

Economic extortion

Accepted Answer

A) involves giving, offering, soliciting, or receiving things of value to influence an official in the performance of his or her lawful duties 
B) occurs when an employee acts of behalf of a third party during the discharge or his or her duties 
C) is the use of threat of force by an individual or organization to obtain something of value 
D) all of the above 
A) involves giving, offering, soliciting, or receiving things of value to influence an official in the performance of his or her lawful duties 
B) occurs when an employee acts of behalf of a third party during the discharge or his or her duties 
C) is the use of threat of force by an individual or organization to obtain something of value 
D) all of the above

Question 11

According to an ACFE study,when it comes to fraud losses

Accepted Answer

A) the median fraud loss caused by males is more than double that caused by females 
B) most frauds are committed by individuals acting alone 
C) managers commit more frauds than employees 
D) all of the above 
A) the median fraud loss caused by males is more than double that caused by females 
B) most frauds are committed by individuals acting alone 
C) managers commit more frauds than employees 
D) all of the above

Question 12

Copyright laws and computer industry standards have been developed jointly and rarely conflict.

Accepted Answer

A) True 
 B)False

Question 13

Since all fraud involves some form of financial misstatement,how is fraudulent statement fraud different?

Accepted Answer

Fraudulent statements are associated wit

Question 14

Which of the following is not an input control?

Accepted Answer

A) range check 
B) limit check 
C) spooling check 
D) validity check 
A) range check 
B) limit check 
C) spooling check 
D) validity check

Question 15

One characteristic of employee fraud is that the fraud

Accepted Answer

A) is perpetrated at a level to which internal controls do not apply 
B) involves misstating financial statements 
C) involves the direct conversion of cash or other assets to the employee's personal benefit 
D) involves misappropriating assets in a series of complex transactions involving third parties 
A) is perpetrated at a level to which internal controls do not apply 
B) involves misstating financial statements 
C) involves the direct conversion of cash or other assets to the employee's personal benefit 
D) involves misappropriating assets in a series of complex transactions involving third parties

Question 16

Segregation of duties is an example of an internal control procedure.

Accepted Answer

A) True 
 B)False

Question 17

What are the six categories of physical control activities discussed in the text?

Accepted Answer

Transaction authorization,segr

Question 18

When duties cannot be segregated,the most important internal control procedure is

Accepted Answer

A) supervision 
B) independent verification 
C) access controls 
D) accounting records 
A) supervision 
B) independent verification 
C) access controls 
D) accounting records

Question 19

Control weaknesses associated with creating an output file as an intermediate step in the printing process (spooling)include all of the following actions by a computer criminal except

Accepted Answer

A) gaining access to the output file and changing critical data values 
B) using a remote printer and incurring operating inefficiencies 
C) making a copy of the output file and using the copy to produce illegal output reports 
D) printing an extra hardcopy of the output file 
A) gaining access to the output file and changing critical data values 
B) using a remote printer and incurring operating inefficiencies 
C) making a copy of the output file and using the copy to produce illegal output reports 
D) printing an extra hardcopy of the output file

Question 20

A physical inventory count is an example of a

Accepted Answer

A) preventive control 
B) detective control 
C) corrective control 
D) feedforward control 
A) preventive control 
B) detective control 
C) corrective control 
D) feedforward control

Describe the factors that constitute the fraud triangle.Why is it important to auditors?

Business ethics involves

Which of the following is not part of the COSO framework?

Skimming involves stealing cash from an organization after it is recorded on the organization's books and records.

The text describes six internal control activities.List four of them and provide a specific example of each one.

Opportunity involves direct access to assets and/or access to information that controls assets.

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Four underlying problems that called pre-SOX federal security law adequacy into question were addressed in the text.Discuss two of these problems.

Ethical issues and legal issues are essentially the same.

Economic extortion

According to an ACFE study,when it comes to fraud losses

Copyright laws and computer industry standards have been developed jointly and rarely conflict.

Since all fraud involves some form of financial misstatement,how is fraudulent statement fraud different?

Which of the following is not an input control?

One characteristic of employee fraud is that the fraud

Segregation of duties is an example of an internal control procedure.

What are the six categories of physical control activities discussed in the text?

When duties cannot be segregated,the most important internal control procedure is

Control weaknesses associated with creating an output file as an intermediate step in the printing process (spooling)include all of the following actions by a computer criminal except

A physical inventory count is an example of a

The Information System: an Accountants Perspective

Introduction to Transaction Processing

The Revenue Cycle

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

Financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Auditing It Controls Part I: Sarbanes-Oxley and It Governance

Auditing It Controls Part II: Security and Access

Auditing It Controls Part III: Systems Development, program Changes, and Application Auditing

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Exam 3: Ethics,fraud,and Internal Control

Describe the factors that constitute the fraud triangle.Why is it important to auditors?

Business ethics involves

Which of the following is not part of the COSO framework?

Skimming involves stealing cash from an organization after it is recorded on the organization's books and records.

The text describes six internal control activities.List four of them and provide a specific example of each one.

Opportunity involves direct access to assets and/or access to information that controls assets.

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Four underlying problems that called pre-SOX federal security law adequacy into question were addressed in the text.Discuss two of these problems.

Ethical issues and legal issues are essentially the same.

Economic extortion

According to an ACFE study,when it comes to fraud losses

Copyright laws and computer industry standards have been developed jointly and rarely conflict.

Since all fraud involves some form of financial misstatement,how is fraudulent statement fraud different?

Which of the following is not an input control?

One characteristic of employee fraud is that the fraud

Segregation of duties is an example of an internal control procedure.

What are the six categories of physical control activities discussed in the text?

When duties cannot be segregated,the most important internal control procedure is

Control weaknesses associated with creating an output file as an intermediate step in the printing process (spooling)include all of the following actions by a computer criminal except

A physical inventory count is an example of a

The Information System: an Accountants Perspective

Introduction to Transaction Processing

The Revenue Cycle

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

Financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Auditing It Controls Part I: Sarbanes-Oxley and It Governance

Auditing It Controls Part II: Security and Access

Auditing It Controls Part III: Systems Development, program Changes, and Application Auditing

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