Question 1

Which of the following allows managers and others to become aware of employees' pressures, problems, and rationalizations, thus enabling them to take fraud prevention steps?

Accepted Answer

A)  Office grapevine 
B)  Open-door policies 
C)  Code of ethics 
D)  Pygmalion effect 
A)  Office grapevine 
B)  Open-door policies 
C)  Code of ethics 
D)  Pygmalion effect

Question 2

Jim was a crook. He embezzled $450,000 from his employer. When his employer found out about his misdeeds, before even conducting a thorough investigation, he went and gave all the details to a local newspaper agency. The next day Jim read his own story, with his own name, in the newspaper. Which of the following is correct?

Accepted Answer

A)  The company did the right thing by publishing Jim's identity in the newspaper because it punished him for stealing as well as served a warning to his neighbors who might also be at the risk of being defrauded. 
B)  The company should not have put Jim's name and story in the paper because when other employees will come to know about it, they might leave the organization. 
C)  Jim may have been misrepresented in the story by the newspaper agency and the company might face legal consequences. 
D)  Publishing the story in the newspaper was a wrong thing to do because Jim's family will be embarrassed. 
A)  The company did the right thing by publishing Jim's identity in the newspaper because it punished him for stealing as well as served a warning to his neighbors who might also be at the risk of being defrauded. 
B)  The company should not have put Jim's name and story in the paper because when other employees will come to know about it, they might leave the organization. 
C)  Jim may have been misrepresented in the story by the newspaper agency and the company might face legal consequences. 
D)  Publishing the story in the newspaper was a wrong thing to do because Jim's family will be embarrassed.

Question 3

One way to create and communicate clear expectations about what is and is not acceptable in an organization is:

Accepted Answer

A)  having separate, nonintegrated personnel and operating policies. 
B)  creating an expectation of punishment. 
C)  following a reactive management style. 
D)  having a clearly defined code of conduct in place. 
A)  having separate, nonintegrated personnel and operating policies. 
B)  creating an expectation of punishment. 
C)  following a reactive management style. 
D)  having a clearly defined code of conduct in place.

Question 4

Which of the following is the foundation for all other components of internal control, providing discipline and structure?

Accepted Answer

A)  Open-door policy 
B)  Control environment 
C)  Whistle-blowing system 
D)  Surveillance 
A)  Open-door policy 
B)  Control environment 
C)  Whistle-blowing system 
D)  Surveillance

Question 5

Which of the following is a step that organizations should undertake while recruiting employees?

Accepted Answer

A)  Conduct a covert investigation on the background of each candidate. 
B)  Consider the candidate's word as truth to ensure a culture of trust and honesty. 
C)  Require candidates to certify that all information on their résumé is accurate. 
D)  Verify the candidate's race, age, and religion during the interview. 
A)  Conduct a covert investigation on the background of each candidate. 
B)  Consider the candidate's word as truth to ensure a culture of trust and honesty. 
C)  Require candidates to certify that all information on their résumé is accurate. 
D)  Verify the candidate's race, age, and religion during the interview.

Question 6

A good fraud auditing involves four steps. Which of the following is the correct sequence?

Accepted Answer

A)  Identifying fraud risk exposures; building audit programs to proactively look for symptoms and exposures; investigating fraud symptoms identified; and identifying the fraud symptoms of each exposure. 
B)  Identifying fraud risk exposures; identifying the fraud symptoms of each exposure; building audit programs to proactively look for symptoms and exposures; and investigating fraud symptoms identified. 
C)  Building audit programs that proactively check for symptoms and exposures; identifying fraud risk exposures; identifying the fraud symptoms of each exposure; and investigating fraud symptoms identified. 
D)  Identifying the fraud symptoms of each exposure; identifying fraud risk exposures; investigating fraud symptoms identified; and building audit programs to proactively look for symptoms and exposures. 
A)  Identifying fraud risk exposures; building audit programs to proactively look for symptoms and exposures; investigating fraud symptoms identified; and identifying the fraud symptoms of each exposure. 
B)  Identifying fraud risk exposures; identifying the fraud symptoms of each exposure; building audit programs to proactively look for symptoms and exposures; and investigating fraud symptoms identified. 
C)  Building audit programs that proactively check for symptoms and exposures; identifying fraud risk exposures; identifying the fraud symptoms of each exposure; and investigating fraud symptoms identified. 
D)  Identifying the fraud symptoms of each exposure; identifying fraud risk exposures; investigating fraud symptoms identified; and building audit programs to proactively look for symptoms and exposures.

Question 7

Which of the following observations is true?

Accepted Answer

A)  The effectiveness of an ideal control system should be independent of the people enforcing it. 
B)  No internal control structure can ever be completely effective, regardless of the care followed in its design and implementation. 
C)  A control system by itself can provide assurance that fraud will be prevented. 
D)  The types of control activities include reactive controls and proactive controls. 
A)  The effectiveness of an ideal control system should be independent of the people enforcing it. 
B)  No internal control structure can ever be completely effective, regardless of the care followed in its design and implementation. 
C)  A control system by itself can provide assurance that fraud will be prevented. 
D)  The types of control activities include reactive controls and proactive controls.

Question 8

Which of the following is FALSE regarding a comprehensive approach to fighting fraud?

Accepted Answer

A)  Detecting fraud is the responsibility of the independent auditors 
B)  Evaluating controls is the function of the internal auditor 
C)  Corporate security officers see their role as investigative 
D)  Employees are in the best position to prevent and spot fraud 
A)  Detecting fraud is the responsibility of the independent auditors 
B)  Evaluating controls is the function of the internal auditor 
C)  Corporate security officers see their role as investigative 
D)  Employees are in the best position to prevent and spot fraud

Question 9

A good internal control system includes:

Accepted Answer

A)  open work environments. 
B)  rigid rules. 
C)  segregation of duties. 
D)  following strict hiring procedures. 
A)  open work environments. 
B)  rigid rules. 
C)  segregation of duties. 
D)  following strict hiring procedures.

Question 10

An organization has a policy requiring the dual counting of all incoming cash receipts. Which control activity is being used here?

Accepted Answer

A)  Segregation of duties 
B)  Proper authorizations 
C)  Physical safeguards 
D)  Documents and records 
A)  Segregation of duties 
B)  Proper authorizations 
C)  Physical safeguards 
D)  Documents and records

Question 11

A company used computer auditing techniques to compare employees' telephone numbers with vendors' telephone numbers. This is an example of which step in a proactive fraud auditing?

Accepted Answer

A)  Identifying fraud risk exposures 
B)  Identifying the fraud symptoms of each exposure 
C)  Building audit programs to proactively look for symptoms and exposures 
D)  Investigate fraud symptoms identified 
A)  Identifying fraud risk exposures 
B)  Identifying the fraud symptoms of each exposure 
C)  Building audit programs to proactively look for symptoms and exposures 
D)  Investigate fraud symptoms identified

Question 12

Which of the following questions should be avoided during a job interview?

Accepted Answer

A)  Can you tell me your birth date? 
B)  If the opportunities in your previous assignment were good, why did you leave it? 
C)  Can you relate an instance in which you resolved a conflict with a co-worker? 
D)  What motivates you at work? 
A)  Can you tell me your birth date? 
B)  If the opportunities in your previous assignment were good, why did you leave it? 
C)  Can you relate an instance in which you resolved a conflict with a co-worker? 
D)  What motivates you at work?

Question 13

Which of the following environments will be LEAST conducive to fraud?

Accepted Answer

A)  Perceived inequalities in the organization and inadequate pay 
B)  Unreasonable budget expectations 
C)  Proactive management 
D)  High employee turnover 
A)  Perceived inequalities in the organization and inadequate pay 
B)  Unreasonable budget expectations 
C)  Proactive management 
D)  High employee turnover

Question 14

Which of the following should employers always obtain from the applicant to obtain information from references?

Accepted Answer

A)  A verbal authorization 
B)  A hold harmless agreement 
C)  A privacy statement 
D)  A no-objection certificate 
A)  A verbal authorization 
B)  A hold harmless agreement 
C)  A privacy statement 
D)  A no-objection certificate

Question 15

What is the most widely recognized way to deter fraud?

Accepted Answer

A)  Encourage employees to report suspicious activity. 
B)  Implement a good system of controls. 
C)  Keep management involved in company procedures. 
D)  Quickly punish employees found committing fraud. 
A)  Encourage employees to report suspicious activity. 
B)  Implement a good system of controls. 
C)  Keep management involved in company procedures. 
D)  Quickly punish employees found committing fraud.

Question 16

What does the acronym "EAP" stand for?

Accepted Answer

A)  Entrepreneurial Assistance Program 
B)  Employee Assistance Program 
C)  Ethical Awareness Program 
D)  Employee Anti-Fraud Program 
A)  Entrepreneurial Assistance Program 
B)  Employee Assistance Program 
C)  Ethical Awareness Program 
D)  Employee Anti-Fraud Program

Question 17

Which of the following is a sign of a positive work environment?

Accepted Answer

A)  Rigid rules followed by the organization 
B)  Managers who care about the employee work ethic 
C)  Careful hiring policies 
D)  Having positive personnel and operating procedures 
A)  Rigid rules followed by the organization 
B)  Managers who care about the employee work ethic 
C)  Careful hiring policies 
D)  Having positive personnel and operating procedures

Question 18

Which of the following is the role of an internal auditor in an organization?

Accepted Answer

A)  To establish the controls for the organization 
B)  To write the code of ethical business conduct for the organization 
C)  To test the system of internal controls in order to attest that there are no material weaknesses 
D)  To assist management with the evaluation of internal controls currently in place 
A)  To establish the controls for the organization 
B)  To write the code of ethical business conduct for the organization 
C)  To test the system of internal controls in order to attest that there are no material weaknesses 
D)  To assist management with the evaluation of internal controls currently in place

Question 19

What are the key attributes for a low-fraud environment?

Accepted Answer

A)  Rules, control, and consequences 
B)  Recognition, prosecution, and restitution 
C)  Honesty, openness, and assistance 
D)  Rules, consequences, and rewards 
A)  Rules, control, and consequences 
B)  Recognition, prosecution, and restitution 
C)  Honesty, openness, and assistance 
D)  Rules, consequences, and rewards

Question 20

Recruitment interview questions that deal with an applicant's race, sex, age, religion, color, national origin, or disability:

Accepted Answer

A)  are allowed in most circumstances. 
B)  are allowed as long as the interviewee has verbally agreed. 
C)  are prohibited unless the criterion is pre-approved by the company management. 
D)  are usually prohibited unless the criterion is a bona fide occupational qualification. 
A)  are allowed in most circumstances. 
B)  are allowed as long as the interviewee has verbally agreed. 
C)  are prohibited unless the criterion is pre-approved by the company management. 
D)  are usually prohibited unless the criterion is a bona fide occupational qualification.

Which of the following allows managers and others to become aware of employees' pressures, problems, and rationalizations, thus enabling them to take fraud prevention steps?

One way to create and communicate clear expectations about what is and is not acceptable in an organization is:

Which of the following is the foundation for all other components of internal control, providing discipline and structure?

Which of the following is a step that organizations should undertake while recruiting employees?

A good fraud auditing involves four steps. Which of the following is the correct sequence?

Which of the following observations is true?

Which of the following is FALSE regarding a comprehensive approach to fighting fraud?

A good internal control system includes:

An organization has a policy requiring the dual counting of all incoming cash receipts. Which control activity is being used here?

A company used computer auditing techniques to compare employees' telephone numbers with vendors' telephone numbers. This is an example of which step in a proactive fraud auditing?

Which of the following questions should be avoided during a job interview?

Which of the following environments will be LEAST conducive to fraud?

Which of the following should employers always obtain from the applicant to obtain information from references?

What is the most widely recognized way to deter fraud?

What does the acronym "EAP" stand for?

Which of the following is a sign of a positive work environment?

Which of the following is the role of an internal auditor in an organization?

What are the key attributes for a low-fraud environment?

Recruitment interview questions that deal with an applicant's race, sex, age, religion, color, national origin, or disability:

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Recognizing the Symptoms of Fraud

Data-Driven Fraud Detection

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 4: Preventing Fraud

Which of the following allows managers and others to become aware of employees' pressures, problems, and rationalizations, thus enabling them to take fraud prevention steps?

One way to create and communicate clear expectations about what is and is not acceptable in an organization is:

Which of the following is the foundation for all other components of internal control, providing discipline and structure?

Which of the following is a step that organizations should undertake while recruiting employees?

A good fraud auditing involves four steps. Which of the following is the correct sequence?

Which of the following observations is true?

Which of the following is FALSE regarding a comprehensive approach to fighting fraud?

A good internal control system includes:

An organization has a policy requiring the dual counting of all incoming cash receipts. Which control activity is being used here?

A company used computer auditing techniques to compare employees' telephone numbers with vendors' telephone numbers. This is an example of which step in a proactive fraud auditing?

Which of the following questions should be avoided during a job interview?

Which of the following environments will be LEAST conducive to fraud?

Which of the following should employers always obtain from the applicant to obtain information from references?

What is the most widely recognized way to deter fraud?

What does the acronym "EAP" stand for?

Which of the following is a sign of a positive work environment?

Which of the following is the role of an internal auditor in an organization?

What are the key attributes for a low-fraud environment?

Recruitment interview questions that deal with an applicant's race, sex, age, religion, color, national origin, or disability:

The Nature of Fraud

Who Commits Fraud and Why

Fighting Fraud: an Overview

Recognizing the Symptoms of Fraud

Data-Driven Fraud Detection

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