1) Corporate governance is the set of processes, customs, and policies that affect the
way an organization is directed.
2) When an employee skims money off-book sales of merchandise, the theft can be
detected by comparing the register tape to the cash drawer.
3) In the criminal justice system, individuals can be named as defendants, but
businesses and other organizations may not be prosecuted.
4) Undercover operations are another tool used primarily by forensic accountants and
sometimes by private investigators.
5) In contrast to a fact or lay witness, an expert witness is one who, by virtue of
education, profession, publication, or experience, is believed to have special knowledge
of his or her subject beyond that of the average person, sufficient that others may
officially (and legally) rely upon the opinion.
6) An association matrix is not useful for identifying major players who are central to
an investigation and to identify linkages between those players.
7) Generally, in order to pursue a claim for legal damages successfully, the injured party
must prove two points: liability and damages.
8) The principle behind full disclosure, once again, is that any material deviation from
generally accepted accounting principles must be explained to the reader of the
financial information..
9) Restoring data and files is a more sophisticated approach to recovering deleted files.
10) The asset valuation model starts with the assumption that the organizations balance
sheet does a reasonably good job of identifying the companys assets and liabilities.
11) Anyone in a public park, parking lot, or mall may be videotaped without violating
any laws as long as no audio of the target is recorded.
12) When asked sensitive or emotive questions, the dishonest person typically will
change his or her posture completelyas if moving away from you.
13) One way fast food restaurants discourage the pocketing of cash by cashiers is:
a.Having two separate windows: one for ordering and one for payment
b.Requiring employees issue a receipt
c.Offering a cash reward to customers who do not receive a receipt
d.Both a and c
14) Falsifying hours worked is detected by:
a.Transferring time and attendance data responsibility to personnel
b.Transferring funds for payroll from the general account to the payroll account
c.Requiring employees sign for the hours worked
d.All of the above
15) One of the major functions of data security and privacy tools such as Privacy Suite
is to:
A.Copy files
B.Rename files
C.Overwrite files
D.Recycle files
16) The tort, known as conversion is correctly stated as:
A.the taking of property of another with the intent to deprive the owner of its use or
possession
B.an assumption and exercise of the right of ownership over goods or personal chattels
belonging to another
C.the carrying away of the property of another without the consent of the owner
D.an unauthorized assumption and exercise of the right of ownership over goods or
personal chattels belonging to another, to the alteration of their condition or the
exclusion of the owners rights
17) Which of the following would be classified as a business reversal that leads to the
perception of non-shareable financial problems?
A.problems arising from inflation
B.problems arising from high interest rates
C.problems arising from economic downturns
D.problems arising from having no one to turn to
18) Which of the following individuals theorized that the learning of criminal activity
usually occurred within intimate personal groups?
A.Donald Cressey
B.Steve Albrecht
C.Edwin Sutherland
D.Richard Hollinger and John Clark
19) Detecting altered documents can be performed by searching for:
a.Erasures
b.Stray marks
c.Use of facsimile signatures
d.All of the above
20) One way of demonstrating that the act was fraud and not a mistake is by:
a.Demonstrating that the employee concealed the act
b.Showing that there were multiple incidents of the same act
c.The destruction of evidentiary documents that describe the act
d. All of the above
21) The biggest advantage investigators have when tracing the flow of illegal funds is:
a.Most illegal funds consist of electronic transfers, making detection easier
b.Most illegal funds at some time flow through a bank in the US making detection
easier
c.Most illegal funds return to the persons performing the laundering making detection
easier
d.Most illegal funds are converted to hard assets making detection easier
22) Regarding theft, Hollinger and Clark were able to confirm a direct relationship
between:
A.computerized inventory control and sick leave policy
B.an employees position and the level of theft
C.lower levels of income and higher levels of theft
D.None of these were confirmed as a direct relationship
23) Overall, management must design, implement, and maintain:
A.an internal controls program to protect entity assets, liabilities, and owners equity
B.internal controls and financial reporting processes to produce timely financial and
nonfinancial information that reflects the underlying economics of the business
C.an accounting system that is in full compliance with U.S. GAAP accounting
principles
D.All of the choices are correct
24) When the losses caused by fraud are correlated to the levels of compensation of the
perpetrator, the line is somewhat linear, with slow rise from low compensation to
approximately:
A.$100,000 annually where the rate of loss skyrockets
B.$300,000 annually where the rate of loss skyrockets
C.$500,000 annually where the rate of loss skyrockets
D.$750,000 annually where the rate of loss skyrockets
25) Register disbursement fraud in the form of falsified returns can be detected by:
a.Inventory counts
b.Cash counts
c.Examination of return receipts
d.All of the above
26) Albrecht developed the fraud scale which includes the following components:
A.situational pressures, perceived opportunity, and personal integrity
B.high personal debt, living beyond ones means, drug or alcohol problems
C.situational pressures, personal integrity, and criminal record
D.None of the above are the components for the fraud scale
27) In terms of the definition of occupational fraud and abuse, who is an employee?
A.Any person who receives regular and periodic compensation from an organization for
his or her labor
B.Only rank and file workers
C.Any trust violator
D.Respectable business and professional men
28) The audit committee oversees the adequacy and effectiveness of the companys
internal control structure to ensure all of the following except:
A.the efficiency and effectiveness of operations
B.the timeliness of financial reporting
Cthe reliability of financial reporting
D.compliance with applicable laws and regulations
29) Hollinger and Clark asserted that management must pay attention to all of the
following aspects of policy development except::
A.continuous dissemination of positive information reflective of the companys policies
B.enforcement of sanctions
C.substantially increasing the internal security presence
D.publicizing the sanctions
30) When using red flags as a basis for further investigation:
A.each fraud will have some unique attributes
B.each fraud has common elements making identification easier
C.red flags prove of very limited value due to their massive number in day-to-day
operations
D.All of the choices are correct
31) Conversion can be shown to have occurred by:
a.Tracing the money to the defendants care
b.Tracing the money to the defendants department
c.Tracing the money to the defendants bank account
d.All of the above
32) Red flags, symptoms of fraud, often go unnoticed or are not vigorously pursued
because:
A.there is not supporting evidence of fraud
B.the red flags are not associated with financial statement preparation
C.there are many red flags in day-to-day operations that are not fraud indicators
D.the audit committee is involved in other investigations
33) Which of the following is not a major form of negotiated settlements in a civil trial?
A.out-of-court settlements
B.majority jury vote
C.arbitration
D.mediation
34) The use of a company office supplies for personal use would be:
A.Permissible in most circumstances
B.A misuse of assets
C.A purchasing scheme
D.Allowable under Sarbanes-Oxley
35) Which of the following renders the separation of duties control useless:
a.Fraudulent maker
b.Fraudulent payee
c.Rubber stamping
d.None of the above
36) When independent businessmen in Cresseys study converted deposits that had been
entrusted to them, they explained it as:
A.borrowing
B.the funds were really theirs, so you cant steal from yourself
C.everyone does it
D.All of the above
37) Correlation analysis in data extraction and analysis software could be used to
discover all EXCEPT:
A.Correlations where none existed previously
B.Non-existent inventory
C.Correlations that currently exist
D.How variables move in the same direction
38) Transferring funds obtained illegally from a safe deposit box in the US to a safe
deposit box in Canada is an example of:
a.Reiniating
b.Layering
c.Placement
d.None of the above (reason: Placement must introduce funds to the financial system;
placing funds in a safe deposit box does not do this.)
39) The interrelationship among auditing, fraud examination, and financial forensics is:
A.established and maintained by legal structures and justice processes
B.constant even while social and cultural pressures are exerted on it
C.based on the SOX Act and SAS 99
D.dynamic and changes over time
40) If you wanted to issue new stock, which type of bank would you use:
a.Private
b.Commercial
c.Savings
d.none of the above
41) In data analysis and extraction software, the types of queries conducted on accounts
receivable would includes everything EXCEPT:
A.Identifying debits to expense accounts
B.Create a list of customer limit increases
C.Age accounts receivable in various formats
D.Identify gaps in the sequence of invoice numbers
42) The fraud theory approach involves the following steps, in the order of their
occurrence is:
A.create hypotheses, analyze available data, test the hypotheses, refine and amend the
hypothesis, and draw conclusions
B.analyze available data, create hypotheses, test the hypotheses, refine and amend the
hypothesis, and draw conclusions
C.create hypotheses, test the hypotheses, analyze available data, refine and amend the
hypothesis, and draw conclusions
D.None of the above are in proper order
43) Evidence can best be defined as:
A.only tangible objects legally presented at a trial
B.anything perceivable by the five senses and legally presented at trial
C.only records, documents, facts, data, or tangible objects legally presented at trial
D.only witness testimony accepted by both the plaintiff and defendant
44) In cash larceny schemes, what methods may be used to conceal these schemes at
the point of sale?
45) How can conflicts of interest be prevented and detected?
46) What is the expectations gap?
47) Which of the following is NOT a step in the admission-seeking interview
(interrogation)?
E.Establish rationalization
F.Defuse alibis
G.Obtain the benchmark admission
H.Offer clemency
48) An oral statement in court as to what the witness heard from another coworker is
called testimony evidence.
49) What is meant by demonstrative evidence? Give examples.
50) One way of diverting revenue for personal gain is to make fictitious sales to
accomplices using bogus credit cards and splitting the difference.