1) Perhaps the biggest key to preventing skimming of any kind is to maintain a viable
oversight presence at any point where cash enters an organization.
2) Rationalizations provide a morally unjustifiable reason for the targets actions.
3) In some cases, documents are not only subjected to confirmation with external
transaction participants but also subjected to fingerprint analysis and procedures for
forgery and/or fictitious or altered documents.
4) Practicing professionals, because of the nature of their independence and objectivity,
should not accept contingent fee arrangements.
5) Dishonest people typically have tolerant attitudes toward illegal or unethical conduct.
6) It is generally not necessary to determine the loss period in measuring commercial
damages.
7) In addition to the criminal and civil justice systems, regulatory agencies also play an
important role in monitoring illegal activities and pursuing those responsible.
8) SOX also makes it unlawful for any officer or director of a public company to take
any action to fraudulently influence, coerce, manipulate, or mislead an auditor in the
performance of an audit of the companys financial statements.
9) The SEC has created the Forensic and Valuation Services Section to provide support
to forensic accounting professionals.
10) Freezing orders, restraining orders, and judicial injunctions are used early in a legal
action to secure funds so that they do not disappear prior to obtaining a favorable
verdict or negotiated settlement.
11) In warranty liability fraud, the warranty liability is usually either omitted or
substantially understated.
12) In turnaround sales scheme, an employee knows his employer is seeking to
purchase a certain asset and takes advantage of the situation by purchasing the asset
himself.
13) Recovering deleted files is not considered difficult, provided that the file has not
been overwritten or corrupted and that the drive has not been repartitioned or
reformatted.
14) Bid-rigging schemes usually occur in the pre-solicitation phase, the solicitation
phase, or the submission phase of the bidding process.
15) The unfortunate death of a person where another party may be held accountable can
result in two general types of cases: wrongful death and survival actions.
16) Generally, evidence is admissible in court if it is relevant, its probative value
outweighs any prejudicial effects, and it is trustworthy.
17) When a defendant does not pay amounts owed to victims and plaintiffs as outlined
in a judgment, the claimant may return to court to obtain various types of orders for the
seizure and sale of specific property, usually at auction.
18) Economic extortion schemes are committed when one person demands payment
from another.
19) Related-party transactions occur when a company does business with another entity
whose management or operating policies can be controlled or significantly influenced
by the company or by some other party in common
20) The difference between tax avoidance and tax evasion is that:
a.Avoidance is illegal; evasion is not
b.Avoidance is intentional; evasion is accidental
c.Avoidance is legal; evasion is not
d.None of the above
21) According to Mr. Sam E. Antar (former Crazy Eddie CFO and a convicted felon),
A.CPAs must maintain their current level of stress in continuing professional education
on white-collar crime
B.he feared the FBI and SEC but has lost that fear over time
C.oversight by the board of directors on the corporation would be increased if board
members served longer terms
D.the president of the corporation should be empowered to select and appoint
appropriately trained and educated board members
22) Investigators and accountants can find data on the internet regarding:
a.Time a person spent in prison
b.Whether or not a person is eligible for social security disability income
c.The type of property owned by an individual
d.All of the above
23) In crime scene investigation, the investigator has three primary goals. Each of the
follow is one of those primary goals except:
A.preservation of evidence
B.validation of evidence
C.collection of evidence
D.protection of evidence
24) Which of the following is an example of money laundering:
a.Purchasing gold from gambling winnings in Las Vegas
b.Depositing cash receipts from the sale of drugs in a cash safe deposit box
c.Depositing cash receipts from prostitution activities in a Swiss bank account
d.All of the above
25) Duplicate searches in data extraction and analysis software could be used to
discover:
A.Invoices that have been paid twice
B.Missing employees
C.Missing invoices
D.Stolen inventory
26) The ________ Amendment prohibits unreasonable searches and seizures.
A.Fifth
B.Fourth
C.Sixth
D.Fourteenth
27) An employee enters the work place on a day off and utilizes the leased
plotter/printer for four hours to produce graphics for his childs school play. The lease
payment is $80 per hour and his wages are $20 per hour. Select the correct statement
from the choices below.
A.This is an abuse at the assumed value of $400
B.This is an instance of fraud at the assumed value of $400
C.This is an abuse at the assumed value of $320
D.This is an instance of fraud at the assumed value of $320
28) Materiality is relative. As such:
A.the amount of stockholders equity is used as a base
B.the type of account and its related financial statement plays an important role in
materiality
C.net income is more critical than total revenues or total expenses
D.materiality threshold values should be increased where management barely qualifies
for bonuses and other short-term compensation
29) As related to operations, the internal auditors evaluate:
A.division profitability
B.product line profitability
C.segment profitability
D.All of the choices are correct
30) Small businesses, such as those with less than one hundred employees, account for
approximately what percentage of the cases in the 2006 and 2008 ACFE surveys?
A.10%-14%
B.35%-27%
C.36%-38%
D.50%-52%
31) The difference between a source and an informant is:
a.A source can have sinister intentions
b.An informant is a good citizen who wishes to remain confidential
c.The reason for an informants cooperation needs to be determined
d.All of the above
32) Fraud can be committed by:
A.intentional misapplication of accounting principles that guide the disclosure of
financial information
B.omission of events, transactions, or other significant information in the notes related
to the financial statements
C.alteration of the underlying accounting data
D.All of the choices are correct
33) Terrorist organizations differ from organized crime groups in that:
a.Terrorists seek anonyminity; organized crime seeks publicity
b.Terrorists seek to corrupt public officials; organized crime seeks to bypass public
officials
c.Terrorists seek publicity; organized crime seeks anonyminity
d.Terrorists seek to coerce and influence officials; organized crime seeks to gain elected
office
34) During the investigation, the anti-fraud professional or forensic accountant has
likely developed a number of presentation tools and analyses with the exception of:
Y.Regression analyses
Z.Link charts
AA.The Evidence/Hypothesis Matrix
BB.Timelines
35) The perpetrators of white-collar crime today:
A.are aware that the FBI thoroughly investigate and document any possible cases due to
the attention created by cases such as Enron and WorldCom
B.are aware that the FBI is understaffed and inadequately trained for fraud
investigations
C.have a great fear of the FBI for its reputation and tenacity in completion of
investigations
D.are fearful of the Securities and Exchange Commission due to its increased power in
the prosecution of white-collar crime since passage of the Sarbanes-Oxley Act in 2002
36) The
A.Auditing standards (for nonpublic companies)
B.Auditing standards (for public companies)
C.Code of professional conduct
D.Compilation and review standards
37) The separation of ownership and control in corporations requires the board of
directors to do all of the following except:
A.allocate rewards in ways that encourage shareholder value creation
B.assess managerial performance
C.divest themselves of corporate stock and future ownership rights
D.review and approve important management decisions
38) All of the following are characteristic of torts except:
A.a private or civil wrong or injury
B.a breach of contract
C.remedy is in the form of an action for damages
D.the party who was injured is entitled to collect damage compensation
39) Following the money:
a.Requires knowledge of every place the money has been
b.Is often difficult to do given the use of foreign banks for layering
c.Often requires access to foreign bank accounts
d.All of the above
40) Upon discovering fraud, internal auditors:
A.must fully investigate it and determine perpetrator(s), value, damage, and recommend
possible action
B.should only continue their investigation if the fraud is in the present or immediately
previous period
C.have an obligation to notify management or the board of directors when the incidence
of significant fraud has been established to a reasonable degree of certainty
D.must provide the audit committee and the board of directors with a preliminary
written statement detailing the known facts and presenting reasonable suspicions as to
perpetrators, values, methods, and time periods affected
41) The primary responsibility to oversee management and direct the internal audit and
the external auditor with regard to the organizations internal controls over financial
reporting and the companys internal control processes rests with the:
A.external audit committee
B.independent auditors
C.president/CEO
D.board of directors and/or the audit committee if one exists
42) The normal order of discovery includes the following steps in what sequence?
1>Interrogatories
2>Attorneys take depositions
3>Request to produce documents
4>Requests for admission
A.1, 3, 2, 4
B.2, 1, 4, 3
C.4, 3, 2, 1
D.1, 2, 3, 4
43) This type of graphic allows the investigator to analyze the movement of goods
services, people and money:
A.Gantt chart
B.Link chart
C.Association matrix
D.Flow diagram
44) All of the following are elements of the Information Systems Audit and Control
Association (ISACA) definition of IT governance as a set of principles to assist
enterprise leaders in their responsibilities except:
A.the organizations information technology needs are aligned with the businesss goals
and deliver value
B.the organizations performance is measured
C.the organizations resources are properly allocated
D.the organizations risks are unmitigated
45) Which of the following is NOT a tool to collect digital evidence?
A.Road MASSter
B.Encase
C.HDD Regenerator
D.Microsoft Dynamics GP
46) The difference between fraud and errors is:
A.the materiality of the value involved
B.intent of those involved
C.whether it affects owners equity or not
D.All of the choices are correct
47) The Miranda warnings consist of everything but the following:
A.The interviewee has a right to remain silent
B.The interviewee has a right to an attorney
C.The interviewees answers may NOT be used against him
D.If the interviewee cannot afford an attorney, one will be provided at no cost
48) PCAOB Auditing Standard No. 3 (AS3), Audit Documentation, requires that audit
engagement documentation should include a list of all EXCEPT:
A.significant fraud risk factors
B.the auditors response
C.the results of the auditors related procedures
A.List of the internal controls
49) Which of the following is not a fraud risk factor?
A.Is there adequate reward for fraud?
B.Is there ample opportunity for fraud?
C.Is there a company culture for a high tolerance of risk?
D.Is management focused on short-term results or personal gain?
50) Practically speaking, the law generally recognizes a fiduciary duty:
A.for cashiers and accountants
B.for ordinary employees handling cash and valuables
C.for officers and directors of a company
D.All of the above are recognized as having a fiduciary duty
51) Data mining software such as Access, ACL, or IDEA allow a large amount of data
to be evaluated quickly for symptoms of fraud and provide evidence of the fraud act or
concealment of the fraud..
52) Violations of ascribed obligations have historically proved to be strong motivators
of financial crimes.
53) List the legal elements of fraud.
54) What steps should an organization take to prevent fraudulent shipments of
merchandise?
55) A proactive computer audit test to detect when a company has a high incidence of
invoice payments below an approval limit that may be reviewable by an audit could
include:
M.Stratify vendor payments by approval limits directly under the approval limit
N.Conduct an intensive audit of 100 percent of all invoices
O.Stratify vendor payment by approval limits directly over the approval limit.
P.Ask the payables clerk to sign a financial disclosure document
56) List and describe three graphical techniques used to support the forensics
professional.