1) Norming or calibrating is the process of observing behavior before critical questions
are asked, as opposed to doing so during questioning.
2) IDEA can read, display, analyze, manipulate, sample, and extract data from files
obtained from many sources in only one format.
3) With the Daubert Rule, the basis of foundation for the opinion may not be based on
junk science. Just because a person qualifies as an expert, that person cannot offer any
opinion unless that opinion is reasonably grounded in scientific fact.
4) In valuing a firms assets for financial statement purposes, it is assumed that the
business is not one that will continue into the future
5) The Fourth Amendment prohibits unreasonable searches and seizures.
6) Video cameras can be installed at cash entry points, but serve little use as a deterrent
against theft.
7) A judgment is a formal and temporary decision made by a court of law.
8) Software like IDEA and ACL is generally not suitable to detect skimming of cash.
9) The main deterrent for fraud in the corporate environment:
A.remains the internal audit team
B.remains the external audit team
C.is the threat of getting caught
D.is the effectiveness of the SEC and FBI investigators
10) Select the most correct statement from those below.
A.Timing Recurring for auditing and fraud examination, nonrecurring for financial
forensics
B.Objectives Opinion for auditing and financial forensics, affix blame for fraud
examination
C.Relationship Nonadversarial for auditing, adversarial for fraud examination, and
independent for financial forensics
D.Methodology Audit techniques for auditing and financial forensics, fraud
examination techniques for fraud examination
11) As compensation of the perpetrator increases the losses associated with the
perpetrator rise most likely because:
A.the perpetrator has a greater appreciation of costly pleasures
B.the perpetrator has greater access to company funds and assets
C.the perpetrator has a higher cost of status and image
D.the perpetrator can coerce others into the scheme
12) What are some of the decisions that need to be made with regard to quantifying lost
revenues and increased expenses?
13) Define the terms fraud prevention, fraud deterrence, and fraud detection and
identify issues of timing.
14) ________ are similar to bribery schemes, except that something of value is given to
an employee to reward a decision rather than influence it.
M.Conflicts of interest
N.Economic extortion
O.Illegal gratuities
P.Expropriation
15) An independent auditors adverse opinion on financial statements indicates the
auditors have completed their work and are concerned with the going concern aspects
of the audited entity.
16) Organized crime activities differ from terrorist activities in that terrorists exist to
bring direct harm to the US.
17) Laws such as the RICO Act (racketeering influence and corrupt organizations),
money laundering, false claims, bankruptcy fraud, tax evasion, conspiracy, and
obstruction of justice require that reasonable believe is established prior to intrusive
searches in order to comply with the regulatory rules of evidence.
18) What are the major differences between internal auditors and external auditors.
What strengths and weaknesses require both to exist?
19) Pressure is a form of motive.