1) Employees who perceive that they will be caught engaging in occupational fraud and
abuse are less likely to commit it.
2) The essence of criminal and civil litigation is controlled confrontation: both sides get
the opportunity to present the facts and circumstances from their opposing perspectives.
3) Another method used by employees to conceal the misapplication of customer
payments is the theft of alteration of account statements.
4) A liar often will use emotionally provocative terms such as steal, lie, and crime.
5) A common skimming scheme is to take unrecorded checks that the perpetrator has
stolen and substitute them for receipted currency.
6) Essentially, two considerations ultimately determine the market and fair market value
of an asset: the past income stream that can be verified and the difference between that
and the income stream from alternative investment options.
7) The Treadway Commission specifically commented on the importance of the tone at
the bottom in respect to the ethics in an organization.
8) Professional standards for expert witnessing require independence, as described in
the
9) An attorney will often request that the fraud professional or forensic accountant
attend the deposition of key witnesses who have knowledge of, or should have
knowledge of, the financial transactions and how they are reflected in the books and
records.
10) In an underbilling scheme the perpetrator sells goods or services above fair market
value to a vendor in which he or she has a hidden interest.
11) Physical and video surveillance by the forensic professional is permitted and
electronic audio evidence (capturing spoken words) does not require court permission.
12) As long as a nonpublic entity is conducting the interview, an employee does not
have the right to have a lawyer present during the interview.
13) Generally, a warrant or subpoena is not required to obtain digital evidence.
14) ACL and IDEA are examples of commercially available data mining software.
15) Which of the following is a fictitious payee:
a.An employee intercepts a legitimate check made payable to a vendor and changes the
payee name to his name
b.An employee writes a check payable to cash and endorses it for his personal use
c.An employee changes the amount of the check to make it larger
d.Both a and b
16) With regard to the review of accounting estimates:
A.prior years estimates should be examined for consistency
B.significant changes in estimating procedures are prohibited
C.the concealment of fraud through estimates is hard since all estimates can be directly
tied to the individual responsible for them
D.All of the choices are correct
17) Targets may enter the criminal justice system from all of the routes below except
for:
A.a warrantless arrest by the police based upon probable cause
B.a grand jury proceeding that leads to an indictment and a subsequent arrest warrant
issued by a judge
C.an investigation that leads to the filing of an Information
A. a citizens arrest
18) One way of hiding assets is to:
a.Place them is a trust
b.Place them in a remote bank
c.Place them in a childs trust
d.All of the above
19) Which of the following is an example of a fictitious maker:
a.A check made payable to person A that is cashed by person B
b.A check based on fraudulent supporting documentation
c.A check whose signature is forged
d.None of the above
20) Red flags indicating predication include:
a.The individual handling cash is undergoing a divorce
b.The individual disbursing checks is divorced
c.The individual receiving cash is sick
d.None of the above
21) The Certified Internal Auditor (CIA) designation is:
A.recognized primarily in the United States
B.the only globally accepted certification for internal auditors
C.recognized primarily within the European Economic Community
D.recognized primarily within Great Britain and Ireland
22) Which of the following is not a major provision in the Sarbanes-Oxley Act of 2002?
A.Creating an independent regulatory framework for the accounting profession
B.Enhancing the quality and transparency of financial reports
C.Revising the process of establishing new financial accounting standards
D.Establishing new protections for corporate whistleblowers
23) The ______ Amendment provides that an individual has the right to an attorney to
defend himself and the right to confront witnesses against him.
A.Fifth
B.Fourth
C.Sixth
D.Fourteenth
24) Select five actions most likely to be associated with forensic psychology.
1>The legal issue of competency and whether a defendant was sane at the time the
crime occurred.
2>The profiling of offenders.
3>Unlawful discrimination.
4>When treating mentally ill offenders.
5>Spousal abuse.
6>Consulting with attorneys when picking a jury.
7>Emphasizes the relationship between the standards of validity and reliability and the
rules of evidence.
8>Pornography.
9>Analyzing a criminals mind and intent.
10>How to improve interrogation methods.
11>Toxic torts.
12>How to evaluate eyewitness testimony.
13>Help design effective correctional facilities.
14>Can help us to understand who commits fraud and why.
A.1, 2, 4, 9, and 11
B.2, 3, 6, 7, and 9
C.1, 6, 10, 12, and 14
D.3, 6, 9,12, and 13
25) Which of the following controls should assist in preventing fraudulent makers:
a.Strict control of the check signing machine
b.Prohibition on the use of facsimile signatures
c.Control of the blank check stock
d.Both a and c
26) Joe Jones is suspected of gambling heavily and not reporting the gains. He also
pays for all expenditures with cash (currency). A method that can be used to detect such
gains would be:
a.Examining bank records
b.Examining lifestyle choices
c.Examining receipts at places where Joe does business
d.All of the above
27) Some of the analytical anomalies include all of the following except:
A.transactions too small or too large for normal activity
B.explained cash shortages
C.excessive purchases
D.excessive debit and credit memos
28) Signs than an individual is a predator fraudster include:
a.Repeat offenses
b.Takes advantage of sudden opportunity
c.Frequent job turnover caused by boredom
d.All of the above
29) In order for evidence to be admitted at trial, it must first be:
a.Real
b.Viable
c.Relevant
d.All of the above
30) A commission scheme can be detected by:
a.Examining sales return patterns
b.Examining sales over a certain amount
c.Examining sales returns
d.All of the above
31) Regarding crimes like fraud, do Federal law allows organizations to be prosecuted
in a manner similar to individuals?
A.No
B.Yes
C.No, but international law does
D.Only if they are the party with the deep pockets in the case
32) As a result of its significant concern with financial statement fraud, the accounting
profession responded in 2002 with:
A.SAS No. 1 Consideration of Fraud in a Financial Statement Audit
B.SAS No. 99 Consideration of Fraud in a Financial Statement Audit
C.the creation of the Public Company Accounting Oversight Board (PCAOB)
D.guidance to overcome the expectation gap held by the public
33) The legal standard for negligence has all of the following elements except:
A.wire fraud
B.duty
C.breach
D.cause in fact
34) Targeted fraud risk assessment starts with:
A.a hotline or anonymous tip
B.the observance of an individual living above his income
C.a solid knowledge, skill, and ability in fraud detection and investigation
D.the discovery of fraudulent documents within a particular department
35) Large fraud perpetrators are more likely to use the money for all of the following
except:
A.to purchase new homes
B.to pay for expensive vacations
C.to support extramarital affairs
D.to pay taxes
36) Corporate governance means:
A.the integrity and quality of the corporations trading value on the market
B.the way a corporation is governed through proper accountability for managerial and
financial performance
C.the reliability, vigilance, and objectivity of the corporate
D.All of the above are correct answers
37) In order to win an award for damages, the injured party under a negligence claim
must generally prove
A.reasonableness and prudence
B.liability and damages
C.intentional violation beyond a reasonable doubt
D.a high threshold of historic violations
38) According to Cressey, the embezzlers that he studied generally rationalized their
crimes by viewing them as all of the following except:
A.They viewed them as essentially noncriminal
B.They viewed them as justified
C.They viewed them as part of a general irresponsibility for which they
were not completely accountable
D.They viewed them as part of skills set
39) Mischaracterized expense schemes include:
a.Paying for entertainment of corporate clients
b.Paying for expenses incurred on behalf of your employees
c.Paying for expenses from an account you control
d.All of the above
40) The functions of data extraction and analysis software tools includes all EXCEPT:
A.Sorting
B.Input into payroll system
C.Verifying multiples of a number
D.Correlations analysis
41) The first step to detecting fraud is to:
A.build an internal control system
B.establish an audit committee and identify its authority
C.seek out red flag transactions and possible anomalies
D.build an understanding of the organization and the environment in which it operates
42) In data analysis and extraction software, the types of queries conducted on sales
analysis would include everything EXCEPT:
A.Analyze sales returns and allowances
B.Selecting specifying journal entries for analysis
C.Summarize trends by customers type
D.Create reports on customer demand
43) Admission seeking questions are posed in a precise order designed to:
E.Clear an innocent person
F.Encourage the culpable person to confess
G.Both A and B
H.None of the above
44) What two points must an injured party prove to recover money in a civil lawsuit?
45) An employee in a small company was responsible for preparing and making the
deposits, recording the deposits in the companys books, and reconciling the bank
statements. This situation is an example of:
I.Strong internal control
J.Weak internal control because of improper segregation of duties
K.Weak internal controls because of a lack of supervision
L.Weak internal controls because the employees are bonded
46) A final concealment strategy with stolen deposits is to carry the missing money as:
I.Outstanding checks
J.Open receivables
K.Closes receivables
L.Deposits in transit
47) ________ questions are those that limit the possible responses by requiring a
precise answer usually yes or no.
E.Open
F.Closed
G.Affirmative
H.Leading
48) Analyze the role of corporate governance mechanisms in fraud prevention.
49) Pyramiding involves the frequent sale and purchase of securities for the sole
purpose
of generating a commission.
50) Overpayment of a vendor invoice is one example of a pay and return scheme.
51) Illegal acts have materiality thresholds and require that auditors pay close attention
to their nature and corresponding consequences to the company.