18) If an employee receives a check from a customer, endorses it and then cashes it, this would
be
considered a(n):
A) disbursement scheme.
B) expense scheme.
C) cash register scheme.
D) check tampering scheme.
19) An employee may embezzle by taking bribes or kickbacks from:
A) suppliers.
B) customers.
C) both suppliers and customers.
D) stockholders of the company.
20) Granting customers a lower sales price for something that benefits you in return would be an
example of a:
A) disbursement scheme.
B) bribe or kickback.
C) cash register scheme.
D) check tampering scheme.
21) Receiving something from a supplier in exchange for authorizing payments for goods not
delivered to the employer would be an example of a:
A) cash receipts scheme.
B) cash register scheme.
C) bribe or kickback.
D) check tampering scheme.
22) Cash register schemes are a form of:
A) employee embezzlement.
B) bribe.
C) fraudulent financial reporting.
D) management fraud.
23) Receiving favors from a supplier by turning a blind eye to the delivery of inferior goods is a
form of:
A) cash register scheme.
B) bribe.
C) fraudulent financial reporting.
D) management fraud.
24) Establishing fake companies, then having the company pay for goods or services that will
never be delivered, and then intercepting and cashing the checks would be an example of a(n):
A) employee embezzlement.
B) management fraud.
C) kickback.
D) bribe.
25) An employee who pockets cash received from a customer without recording the transaction
is an example of a(n):
A) disbursement scheme.
B) expense scheme.
C) cash register scheme.
D) check tampering scheme.
26) Overbilling the company for parking fees or cab fare would be examples of:
A) disbursement schemes.
B) expense schemes.
C) cash register schemes.
D) check tampering schemes.
27) Recording assets that the company does NOT possess is an example of:
A) management fraud.
B) employee fraud.
C) collusion.
D) embezzlement.
28) Which of the following is NOT part of the Fraud Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
29) The chance to commit a fraud, conceal it, and avoid punishment is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
30) Finding good reasons for doing things that we REALLY know are wrong is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
31) Committing a fraud because of a drug habit or living beyond your means is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
32) Committing a fraud because of easy access to a company’s assets is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
33) An employee’s moral beliefs make it impossible to commit a fraud. This best relates to which
part of the Fraud Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
34) An employee believes that getting away with a fraud without being detected is unlikely. This
best relates to which part of the Fraud Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
35) If an employee has a low incentive to commit fraud, the employee does NOT have:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
36) Committing a fraud because of a gambling addiction is related to what part of the Fraud
Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
37) Committing a fraud because the employee feels “I deserve a pay raise. The company owes
this to me” is related to what part of the Fraud Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
38) Committing a fraud because the employee feels that it will be easy to do is related to what
part of the Fraud Triangle?
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
39) ________ can be reduced through a good system of internal control.
A) Realization
B) Perceived opportunity
C) Rationalization
D) Perceived pressure
40) The factor that would make a person feel forced to steal money because of high medical bills
would be:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
41) The factor that might make a person steal money because “The company has more than its
fair share,” would be:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
42) Brian is stealing money because the cash registers are not always locked away at night. This
is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
43) Attempting to justify your actions is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
44) “I didn’t steal the money, I only borrowed it until I can pay it back” is an example of:
A) realization.
B) perceived opportunity.
C) rationalization.
D) perceived pressure.
45) Removing any of the components of the Fraud Triangle:
A) ensures that fraud will be eliminated.
B) makes it more likely that fraud will increase.
C) has no impact on the occurrence of fraud.
D) makes it less likely that fraud will occur.
46) As it relates to accounting fraud, which of the following BEST describes “perceived
pressure”?
A) An element of the fraud triangle in which the employee feels a need to obtain cash or other
assets
B) An element of the fraud triangle in which the employee justifies his or her actions
C) An element of the fraud triangle in which the employee believes there is a chance to commit
and conceal fraud
D) Intentional misrepresentation of the financial statements
47) Joe was overlooked for a promotion and decides to embezzle money because he feels like he
deserved that raise. This is an example of, respectively:
A) perceived opportunity, perceived pressure.
B) perceived pressure, rationalization.
C) perceived opportunity, rationalization.
D) rationalization, perceived pressure.
48) Larry is concerned that the company won’t meet expected earnings, so he overstates
revenues, telling himself “it’s for a good reason!” This is an example of, respectively:
A) perceived pressure, rationalization.
B) perceived opportunity, rationalization.
C) rationalization, perceived pressure.
D) perceived opportunity, perceived pressure.
6.4 Questions
1) Audits confirm the validity and reliability of accounting information.
2) Employees conduct external audits of a business.
3) Generally Accepted Auditing Standards are developed by the Securities and Exchange
Commission.