Question 1

Horizontal analysis is performed when:

Accepted Answer

A)  total assets are set at 100% and all other balances are shown as a percentage of total assets. 
B)  financial statement data are shown for two periods with the amount and percentage of change for each line item. 
C)  there is a need to calculate and compare key ratios from period to period. 
D)  income statement amounts are shown as a percentage of total sales. 
A)  total assets are set at 100% and all other balances are shown as a percentage of total assets. 
B)  financial statement data are shown for two periods with the amount and percentage of change for each line item. 
C)  there is a need to calculate and compare key ratios from period to period. 
D)  income statement amounts are shown as a percentage of total sales.

Question 2

Benford's Law:

Accepted Answer

A)  applies to numbers that have built-in limits. 
B)  is most effectively used with assigned numbers. 
C)  applies best to numbers that occur naturally. 
D)  uses ratios to detect fraud. 
A)  applies to numbers that have built-in limits. 
B)  is most effectively used with assigned numbers. 
C)  applies best to numbers that occur naturally. 
D)  uses ratios to detect fraud.

Question 3

What is the primary advantage of the data-driven approach?

Accepted Answer

A)  The investigator makes hypotheses and tests to see if each one holds true. 
B)  It is less expensive and time intensive than the traditional approach. 
C)  The investigator takes charge of the fraud investigation process. 
D)  Data-driven fraud detection is proactive in nature. 
A)  The investigator makes hypotheses and tests to see if each one holds true. 
B)  It is less expensive and time intensive than the traditional approach. 
C)  The investigator takes charge of the fraud investigation process. 
D)  Data-driven fraud detection is proactive in nature.

Question 4

Which of the following ratios can be used to assess a company's solvency?

Accepted Answer

A)  Current ratio 
B)  Return on assets 
C)  Times-interest-earned ratio 
D)  Inventory turnover 
A)  Current ratio 
B)  Return on assets 
C)  Times-interest-earned ratio 
D)  Inventory turnover

Question 5

Most software packages have functions for generating about columns of data, which include statistical summaries like control totals, mean, maximum, minimum, standard deviation, number of zero values, number of empty records, and so on.

Accepted Answer

A)  captions 
B)  histograms 
C)  headings 
D)  descriptives 
A)  captions 
B)  histograms 
C)  headings 
D)  descriptives

Question 6

Benford's Law can help detect fraud by:

Accepted Answer

A)  establishing weaknesses in the accounting control system. 
B)  identifying accounting anomalies. 
C)  focusing on unexplained changes. 
D)  identifying possible attempts by fraudsters to make stolen amounts look random. 
A)  establishing weaknesses in the accounting control system. 
B)  identifying accounting anomalies. 
C)  focusing on unexplained changes. 
D)  identifying possible attempts by fraudsters to make stolen amounts look random.

Question 7

Which approach converts financial statement numbers to percentages of total assets or total sales?

Accepted Answer

A)  Horizontal analysis 
B)  Vertical analysis 
C)  Ratio analysis 
D)  Variance analysis 
A)  Horizontal analysis 
B)  Vertical analysis 
C)  Ratio analysis 
D)  Variance analysis

Question 8

is the splitting of complex data sets into case-specific tables.

Accepted Answer

A)  Deviation 
B)  Stratification 
C)  Data mining 
D)  Soundex 
A)  Deviation 
B)  Stratification 
C)  Data mining 
D)  Soundex

Question 9

Identify the true statement about detecting fraud using financial statement reports.

Accepted Answer

A)  Performing horizontal analysis requires converting the income statement balances into percentages of gross sales. 
B)  Vertical analysis is the most direct method of focusing on changes from period to period. 
C)  Before performing any data-driven analysis that targets fraud and corruption in financial statements, the numbers in all three types of financial statements need to be converted to percentages. 
D)  Small frauds may not affect the summarized financial statements significantly enough to be detected. 
A)  Performing horizontal analysis requires converting the income statement balances into percentages of gross sales. 
B)  Vertical analysis is the most direct method of focusing on changes from period to period. 
C)  Before performing any data-driven analysis that targets fraud and corruption in financial statements, the numbers in all three types of financial statements need to be converted to percentages. 
D)  Small frauds may not affect the summarized financial statements significantly enough to be detected.

Question 10

Which of the following is an analytical symptom of kickbacks?

Accepted Answer

A)  Decreasing purchases from other vendors 
B)  Charging normal price for goods supplied 
C)  Providing better-quality goods 
D)  Smaller purchase quantities and more frequent orders 
A)  Decreasing purchases from other vendors 
B)  Charging normal price for goods supplied 
C)  Providing better-quality goods 
D)  Smaller purchase quantities and more frequent orders

Question 11

The red flag that is generally identified when employee and vendor telephone numbers are the same is:

Accepted Answer

A)  dummy vendors. 
B)  employees purchasing goods for personal use. 
C)  billing more than once for the same purchase. 
D)  providing poor-quality goods. 
A)  dummy vendors. 
B)  employees purchasing goods for personal use. 
C)  billing more than once for the same purchase. 
D)  providing poor-quality goods.

Question 12

Which of the following statements regarding ODBC is NOT accurate?

Accepted Answer

A)  ODBC stands for Open Database Communications. 
B)  ODBC is a standard method of querying data from corporate relational databases. 
C)  ODBC is a connector between the front-end analysis and the back-end corporate database. 
D)  ODBC is already included with most operating systems. 
A)  ODBC stands for Open Database Communications. 
B)  ODBC is a standard method of querying data from corporate relational databases. 
C)  ODBC is a connector between the front-end analysis and the back-end corporate database. 
D)  ODBC is already included with most operating systems.

Question 13

Which of the following is similar to ACL and is ACL's primary competitor?

Accepted Answer

A)  Picalo 
B)  IDEA 
C)  Microsoft Office + ActiveData 
D)  Z-score 
A)  Picalo 
B)  IDEA 
C)  Microsoft Office + ActiveData 
D)  Z-score

Question 14

Which of the following is the most important step in data analysis?

Accepted Answer

A)  Gathering the right data in the right format in the right time period 
B)  Understanding the available data 
C)  Learning the basics of table structure and field types 
D)  Learning the basics of key relationships and query syntax 
A)  Gathering the right data in the right format in the right time period 
B)  Understanding the available data 
C)  Learning the basics of table structure and field types 
D)  Learning the basics of key relationships and query syntax

Question 15

Specific implementations of delimited text are called TSV. What does TSV stand for?

Accepted Answer

A)  toxicity screening value 
B)  time segmented volume 
C)  tab separated values 
D)  tactical secure voice 
A)  toxicity screening value 
B)  time segmented volume 
C)  tab separated values 
D)  tactical secure voice

Question 16

What is the primary drawback of the data-driven approach?

Accepted Answer

A)  It is more expensive and time intensive than the traditional approach. 
B)  It requires tips and other indicators to become glaring before the approach can be used. 
C)  It cannot highlight frauds while they are still small. 
D)  The investigator loses control of the fraud investigation process. 
A)  It is more expensive and time intensive than the traditional approach. 
B)  It requires tips and other indicators to become glaring before the approach can be used. 
C)  It cannot highlight frauds while they are still small. 
D)  The investigator loses control of the fraud investigation process.

Question 17

Which of the following is a true statement regarding the United States Social Security Administration (SSA)?

Accepted Answer

A)  The SSA publishes a monthly list of newly issued Social Security numbers. 
B)  The SSA publishes a monthly list of Social Security numbers that are no longer in use. 
C)  The SSA database of valid numbers can be accessed by interested parties. 
D)  The SSA database can be used to create mailing lists. 
A)  The SSA publishes a monthly list of newly issued Social Security numbers. 
B)  The SSA publishes a monthly list of Social Security numbers that are no longer in use. 
C)  The SSA database of valid numbers can be accessed by interested parties. 
D)  The SSA database can be used to create mailing lists.

Question 18

Which of the following proactive fraud detection methods use Benford's Law to detect fraud?

Accepted Answer

A)  Vertical analysis 
B)  Digital analysis 
C)  Real-time analysis 
D)  Time trend analysis 
A)  Vertical analysis 
B)  Digital analysis 
C)  Real-time analysis 
D)  Time trend analysis

Question 19

While using financial statement analysis, which ratio will be most useful in assessing the company's operational efficiency?

Accepted Answer

A)  Current ratio 
B)  Quick ratio 
C)  Cost of goods sold percentage 
D)  Inventory turnover 
A)  Current ratio 
B)  Quick ratio 
C)  Cost of goods sold percentage 
D)  Inventory turnover

Question 20

Which of the following is true of most accounting errors?

Accepted Answer

A)  They are primarily caused by lack of training. 
B)  They represent intentional sabotage of controls. 
C)  They are problems caused by failures in systems, procedures, and policies. 
D)  They represent fraud. 
A)  They are primarily caused by lack of training. 
B)  They represent intentional sabotage of controls. 
C)  They are problems caused by failures in systems, procedures, and policies. 
D)  They represent fraud.

Horizontal analysis is performed when:

Benford's Law:

What is the primary advantage of the data-driven approach?

Which of the following ratios can be used to assess a company's solvency?

Most software packages have functions for generating about columns of data, which include statistical summaries like control totals, mean, maximum, minimum, standard deviation, number of zero values, number of empty records, and so on.

Benford's Law can help detect fraud by:

Which approach converts financial statement numbers to percentages of total assets or total sales?

is the splitting of complex data sets into case-specific tables.

Identify the true statement about detecting fraud using financial statement reports.

Which of the following is an analytical symptom of kickbacks?

The red flag that is generally identified when employee and vendor telephone numbers are the same is:

Which of the following statements regarding ODBC is NOT accurate?

Which of the following is similar to ACL and is ACL's primary competitor?

Which of the following is the most important step in data analysis?

Specific implementations of delimited text are called TSV. What does TSV stand for?

What is the primary drawback of the data-driven approach?

Which of the following is a true statement regarding the United States Social Security Administration (SSA)?

Which of the following proactive fraud detection methods use Benford's Law to detect fraud?

While using financial statement analysis, which ratio will be most useful in assessing the company's operational efficiency?

Which of the following is true of most accounting errors?

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

Investigating Theft Acts

Investigating Concealment

Conversion Investigation Methods

Inquiry Methods and Fraud Reports

Financial Statement Fraud

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

E-Commerce Fraud

Legal Follow-Up

Filters

Exam 6: Data-Driven Fraud Detection

Horizontal analysis is performed when:

Benford's Law:

What is the primary advantage of the data-driven approach?

Which of the following ratios can be used to assess a company's solvency?

Most software packages have functions for generating about columns of data, which include statistical summaries like control totals, mean, maximum, minimum, standard deviation, number of zero values, number of empty records, and so on.

Benford's Law can help detect fraud by:

Which approach converts financial statement numbers to percentages of total assets or total sales?

is the splitting of complex data sets into case-specific tables.

Identify the true statement about detecting fraud using financial statement reports.

Which of the following is an analytical symptom of kickbacks?

The red flag that is generally identified when employee and vendor telephone numbers are the same is:

Which of the following statements regarding ODBC is NOT accurate?

Which of the following is similar to ACL and is ACL's primary competitor?

Which of the following is the most important step in data analysis?

Specific implementations of delimited text are called TSV. What does TSV stand for?

What is the primary drawback of the data-driven approach?

Which of the following is a true statement regarding the United States Social Security Administration (SSA)?

Which of the following proactive fraud detection methods use Benford's Law to detect fraud?

While using financial statement analysis, which ratio will be most useful in assessing the company's operational efficiency?

Which of the following is true of most accounting errors?

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Preventing Fraud

Recognizing the Symptoms of Fraud

Investigating Theft Acts

Investigating Concealment

Conversion Investigation Methods

Inquiry Methods and Fraud Reports

Financial Statement Fraud

Revenue- and Inventory-Related Financial Statement Frauds

Liability, Asset, and Inadequate Disclosure Frauds

Fraud Against Organizations

Consumer Fraud

Bankruptcy, Divorce, and Tax Fraud

E-Commerce Fraud

Legal Follow-Up

Filters