Question 1

Which of the following is NOT a possible control activity?

Accepted Answer

A) Having separate authorization,bookkeeping,and custody functions. 
B) Protecting access to important information with a password. 
C) Requiring two individuals to work on the same task. 
D) Supervisory review of each minute task completed by employees. 
A) Having separate authorization,bookkeeping,and custody functions. 
B) Protecting access to important information with a password. 
C) Requiring two individuals to work on the same task. 
D) Supervisory review of each minute task completed by employees. D

Question 2

Documents and records are an important control activity.Which of the following statements concerning this activity is true?

Accepted Answer

A) They serve as excellent preventive controls. 
B) Adequate accountability can exist even in their absence. 
C) The entire accounting system serves as a documentary control. 
D) They are poor detective controls. 
A) They serve as excellent preventive controls. 
B) Adequate accountability can exist even in their absence. 
C) The entire accounting system serves as a documentary control. 
D) They are poor detective controls. C

Question 3

Which of the following is NOT a common rationalization of fraud perpetrators?

Accepted Answer

A) The organization owes me 
B) I'm only borrowing the money 
C) No one will get hurt 
D) I don't deserve more. 
A) The organization owes me 
B) I'm only borrowing the money 
C) No one will get hurt 
D) I don't deserve more. D

Question 4

Which of the following is usually the most expensive of all control procedures?

Accepted Answer

A) Documents and records 
B) Segregation of duties 
C) System of authorizations 
D) Independent checks 
A) Documents and records 
B) Segregation of duties 
C) System of authorizations 
D) Independent checks

Question 5

Individuals often participate in fraud because they believe that by not participating in the fraud scheme,they may lose their job.Which type of power is at play here?

Accepted Answer

A) Expert power 
B) Legitimate power 
C) Coercive power 
D) Reward power 
A) Expert power 
B) Legitimate power 
C) Coercive power 
D) Reward power

Question 6

When management fraud occurs,companies usually:

Accepted Answer

A) overstate assets and net income. 
B) understate assets and net income. 
C) overstate assets and understate net income. 
D) understate assets and overstate net income. 
A) overstate assets and net income. 
B) understate assets and net income. 
C) overstate assets and understate net income. 
D) understate assets and overstate net income.

Question 7

Greed,living beyond one's means and high bills all describe what type of fraud-related pressure?

Accepted Answer

A) Financial 
B) Peer 
C) Vice 
D) Barometric 
E) Work Related 
A) Financial 
B) Peer 
C) Vice 
D) Barometric 
E) Work Related

Question 8

Which of the following people is most likely to have opportunities to commit fraud?

Accepted Answer

A) Rob is a convicted bank robber who has been out of jail for 7 years and is working for a small firm whose manager knows about Rob's criminal background. 
B) Jane is a recent high school graduate who loves shopping.She is on the look out for a job. 
C) Steve was just hired by his company but he is always acting suspicious 
D) 62 year old Dave has loyally worked up his company's corporate ladder for the past 24 years 
A) Rob is a convicted bank robber who has been out of jail for 7 years and is working for a small firm whose manager knows about Rob's criminal background. 
B) Jane is a recent high school graduate who loves shopping.She is on the look out for a job. 
C) Steve was just hired by his company but he is always acting suspicious 
D) 62 year old Dave has loyally worked up his company's corporate ladder for the past 24 years

Question 9

_____ is the ability of the perpetrator to relate to the potential co-conspirator.

Accepted Answer

A) Expert power 
B) Legitimate power 
C) Referent power 
D) Reward power 
A) Expert power 
B) Legitimate power 
C) Referent power 
D) Reward power

Question 10

Which is following observations is TRUE?

Accepted Answer

A) Research shows that only people with a criminal mind set can commit fraud. 
B) Fraud perpetrators usually can be distinguished from others on the basis of demographic characteristics. 
C) Most fraud perpetrators have profiles that look like those of other honest people. 
D) When fraud does occur,the most common reaction by those around the fraud is confession. 
A) Research shows that only people with a criminal mind set can commit fraud. 
B) Fraud perpetrators usually can be distinguished from others on the basis of demographic characteristics. 
C) Most fraud perpetrators have profiles that look like those of other honest people. 
D) When fraud does occur,the most common reaction by those around the fraud is confession.

Question 11

A smart fraudster usually manipulates which financial record in order to better avoid an audit trail?

Accepted Answer

A) Income statement. 
B) Balance sheet. 
C) Statement of cash flows. 
D) Statement of retained earnings. 
A) Income statement. 
B) Balance sheet. 
C) Statement of cash flows. 
D) Statement of retained earnings.

Question 12

Which of the following is NOT an element of a good control environment?

Accepted Answer

A) Trust 
B) Modeling 
C) Appropriate hiring 
D) Management's communication 
A) Trust 
B) Modeling 
C) Appropriate hiring 
D) Management's communication

Question 13

Which of the following is NOT one of the key elements common to all frauds?

Accepted Answer

A) Perceived pressure 
B) Perceived inequality 
C) Perceived opportunity 
D) Rationalization 
A) Perceived pressure 
B) Perceived inequality 
C) Perceived opportunity 
D) Rationalization

Question 14

___________ requires every public company to have a code of ethics to help deter wrongdoing.

Accepted Answer

A) The Glass Steagall legislation 
B) The Sarbanes-Oxley legislation 
C) The Securities Act 
D) Generally Accepted Auditing Standards 
A) The Glass Steagall legislation 
B) The Sarbanes-Oxley legislation 
C) The Securities Act 
D) Generally Accepted Auditing Standards

Question 15

Financial statement fraud is typically committed by:

Accepted Answer

A) Employees with access to company assets 
B) Top management 
C) Customers 
D) Vendors 
A) Employees with access to company assets 
B) Top management 
C) Customers 
D) Vendors

Question 16

Who do criminologists compare fraudsters to in relation to repeat offenses and why?

Accepted Answer

A) Rapists.They repeat their crimes because they are not severely punished. 
B) Shoplifters.They steal goods frequently and in small quantities until they are confronted. 
C) Bank Robbers.They steal a lot of money from wealthy sources. 
D) Bank Tellers.They have access to a large amount of resources and they are perceived to be trustworthy people. 
A) Rapists.They repeat their crimes because they are not severely punished. 
B) Shoplifters.They steal goods frequently and in small quantities until they are confronted. 
C) Bank Robbers.They steal a lot of money from wealthy sources. 
D) Bank Tellers.They have access to a large amount of resources and they are perceived to be trustworthy people.

Question 17

Generally,internal controls are implemented in a corporation to help prevent which element of the fraud triangle?

Accepted Answer

A) Perceived opportunity 
B) Perceived pressure 
C) Rationalization 
D) Authorization 
A) Perceived opportunity 
B) Perceived pressure 
C) Rationalization 
D) Authorization

Question 18

Poor credit could become a ____ that could lead to fraud.

Accepted Answer

A) Financial pressure 
B) Perceived opportunity 
C) Rationalization 
A) Financial pressure 
B) Perceived opportunity 
C) Rationalization

Question 19

According to the study mentioned in the text,which of the following is true about fraud perpetrators compared to property offenders?

Accepted Answer

A) Fraud perpetrators are more likely to be caught than property offenders 
B) Fraud perpetrators are more educated than property offenders 
C) Fraud perpetrators are more likely to be men than property offenders 
D) Fraud perpetrators are much younger than property offenders 
A) Fraud perpetrators are more likely to be caught than property offenders 
B) Fraud perpetrators are more educated than property offenders 
C) Fraud perpetrators are more likely to be men than property offenders 
D) Fraud perpetrators are much younger than property offenders

Question 20

Modeling and labeling are sub-components of which control structure component?

Accepted Answer

A) Control environment 
B) Accounting system 
C) Control procedure 
D) Review 
A) Control environment 
B) Accounting system 
C) Control procedure 
D) Review

Which of the following is NOT a possible control activity?

Documents and records are an important control activity.Which of the following statements concerning this activity is true?

Which of the following is NOT a common rationalization of fraud perpetrators?

Which of the following is usually the most expensive of all control procedures?

Individuals often participate in fraud because they believe that by not participating in the fraud scheme,they may lose their job.Which type of power is at play here?

When management fraud occurs,companies usually:

Greed,living beyond one's means and high bills all describe what type of fraud-related pressure?

Which of the following people is most likely to have opportunities to commit fraud?

_____ is the ability of the perpetrator to relate to the potential co-conspirator.

Which is following observations is TRUE?

A smart fraudster usually manipulates which financial record in order to better avoid an audit trail?

Which of the following is NOT an element of a good control environment?

Which of the following is NOT one of the key elements common to all frauds?

___________ requires every public company to have a code of ethics to help deter wrongdoing.

Financial statement fraud is typically committed by:

Who do criminologists compare fraudsters to in relation to repeat offenses and why?

Generally,internal controls are implemented in a corporation to help prevent which element of the fraud triangle?

Poor credit could become a ____ that could lead to fraud.

According to the study mentioned in the text,which of the following is true about fraud perpetrators compared to property offenders?

Modeling and labeling are sub-components of which control structure component?

The Nature of Fraud

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of 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 2: Why People Commit Fraud

Which of the following is NOT a possible control activity?

Documents and records are an important control activity.Which of the following statements concerning this activity is true?

Which of the following is NOT a common rationalization of fraud perpetrators?

Which of the following is usually the most expensive of all control procedures?

Individuals often participate in fraud because they believe that by not participating in the fraud scheme,they may lose their job.Which type of power is at play here?

When management fraud occurs,companies usually:

Greed,living beyond one's means and high bills all describe what type of fraud-related pressure?

Which of the following people is most likely to have opportunities to commit fraud?

_____ is the ability of the perpetrator to relate to the potential co-conspirator.

Which is following observations is TRUE?

A smart fraudster usually manipulates which financial record in order to better avoid an audit trail?

Which of the following is NOT an element of a good control environment?

Which of the following is NOT one of the key elements common to all frauds?

___________ requires every public company to have a code of ethics to help deter wrongdoing.

Financial statement fraud is typically committed by:

Who do criminologists compare fraudsters to in relation to repeat offenses and why?

Generally,internal controls are implemented in a corporation to help prevent which element of the fraud triangle?

Poor credit could become a ____ that could lead to fraud.

According to the study mentioned in the text,which of the following is true about fraud perpetrators compared to property offenders?

Modeling and labeling are sub-components of which control structure component?

The Nature of Fraud

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of 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