Question 1

Which of the following is the most common method of detecting occupational fraud?

Accepted Answer

A) Financial Statement Audit 
B) Management Review 
C) Internal Audit 
D) Tip from an employee, customer, or vendor 
A) Financial Statement Audit 
B) Management Review 
C) Internal Audit 
D) Tip from an employee, customer, or vendor D

Question 2

Which of the following would be considered a vendor fraud?

Accepted Answer

A) The submission of duplicate or incorrect invoices. 
B) A customer tries to return stolen goods to collect a cash refund. 
C) The use of stolen or fraudulent credit cards. 
D) Inflating hours worked. 
A) The submission of duplicate or incorrect invoices. 
B) A customer tries to return stolen goods to collect a cash refund. 
C) The use of stolen or fraudulent credit cards. 
D) Inflating hours worked. A

Question 3

An example of Cash receipts fraud would include:

Accepted Answer

A) An employee steals checks collected from customers 
B) An employee overstates hours worked on a timecard 
C) Management understates accounts payable amounts 
D) An employee steals checks before being paid to vendors 
A) An employee steals checks collected from customers 
B) An employee overstates hours worked on a timecard 
C) Management understates accounts payable amounts 
D) An employee steals checks before being paid to vendors A

Question 4

Circumstances that provide access to the assets or records that are the objects of the fraudulent activity describes which condition of the Fraud Triangle?

Accepted Answer

A) Rationalization 
B) Incentive 
C) Concealment 
D) Opportunity 
A) Rationalization 
B) Incentive 
C) Concealment 
D) Opportunity

Question 5

Which of the following objectives were not identified as necessary to be provided by an effective accounting system?

Accepted Answer

A) Prepare the appropriate documents 
B) Identify all relevant financial events 
C) Capture the important data 
D) Proper recording and processing of the data 
A) Prepare the appropriate documents 
B) Identify all relevant financial events 
C) Capture the important data 
D) Proper recording and processing of the data

Question 6

If an accounting supervisor were allowed to hire employees, approve the hours worked, prepare the paychecks, and deliver the paychecks, which of the categories of control activities would be violated?

Accepted Answer

A) Adequate records 
B) Segregation of duties 
C) Authorization of transactions 
D) Independent checks 
A) Adequate records 
B) Segregation of duties 
C) Authorization of transactions 
D) Independent checks

Question 7

The risk related to this category of Trust Services Principles could be inaccurate, incomplete, or improperly authorized information.

Accepted Answer

A) Online privacy 
B) Confidentiality 
C) Processing integrity 
D) Security 
A) Online privacy 
B) Confidentiality 
C) Processing integrity 
D) Security

Question 8

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

Accepted Answer

A) Prevention 
B) Investigation 
C) Detection 
D) Correction 
A) Prevention 
B) Investigation 
C) Detection 
D) Correction

Question 9

COSO describes five components of internal control.Which of the following terms is best described as "policies and procedures that help ensure management directives are carried out and management objectives are achieved"?

Accepted Answer

A) Risk assessment 
B) Information and communication 
C) Control activities 
D) Control environment 
A) Risk assessment 
B) Information and communication 
C) Control activities 
D) Control environment

Question 10

Examples of customer fraud include all of the following except:

Accepted Answer

A) Credit Card Fraud 
B) Check Fraud 
C) Cash Fraud 
D) Refund Fraud 
A) Credit Card Fraud 
B) Check Fraud 
C) Cash Fraud 
D) Refund Fraud

Question 11

The theft, concealment, and conversion of personal gain of another's money, physical assets, or information is termed:

Accepted Answer

A) Defalcation 
B) Skimming 
C) Larceny 
D) Fraud 
A) Defalcation 
B) Skimming 
C) Larceny 
D) Fraud

Question 12

Which of the following is NOT one of the three critical actions that a company can undertake to assist with fraud prevention and fraud detection?

Accepted Answer

A) Maintain and enforce a cost of ethics. 
B) Maintain an accounting information system 
C) Maintain a system of accounting internal controls 
D) Maintain a system of information technology controls 
A) Maintain and enforce a cost of ethics. 
B) Maintain an accounting information system 
C) Maintain a system of accounting internal controls 
D) Maintain a system of information technology controls

Question 13

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

Accepted Answer

A) Absolute assurance 
B) Probable assurance 
C) Reasonable assurance 
D) Convincing assurance 
A) Absolute assurance 
B) Probable assurance 
C) Reasonable assurance 
D) Convincing assurance

Question 14

Which of the following is not a common form of employee fraud?

Accepted Answer

A) Inventory theft 
B) Expense account fraud 
C) Payroll fraud 
D) Refund fraud 
A) Inventory theft 
B) Expense account fraud 
C) Payroll fraud 
D) Refund fraud

Question 15

The Sarbanes-Oxley act was passed in 2002 as a Congress's response to the many situations of fraudulent financial reporting discovered during 2001.The intention of the Act was:

Accepted Answer

A) Police the accounting firms responsible for auditing the corporations. 
B) Punish the companies that had been involved in the cases of fraudulent financial reporting. 
C) Establish accounting standards that all companies are to follow. 
D) Reform accounting, financial reporting, and auditing functions of companies that are publicly traded. 
A) Police the accounting firms responsible for auditing the corporations. 
B) Punish the companies that had been involved in the cases of fraudulent financial reporting. 
C) Establish accounting standards that all companies are to follow. 
D) Reform accounting, financial reporting, and auditing functions of companies that are publicly traded.

Question 16

A good system of internal control includes many types of documentation.Which of the following types of documentation is not part of the adequate records and documents category of internal control?

Accepted Answer

A) Schedules and analyses of financial information 
B) Supporting document for all significant transactions 
C) Accounting cycle reports 
D) All of the following are types of documentation 
A) Schedules and analyses of financial information 
B) Supporting document for all significant transactions 
C) Accounting cycle reports 
D) All of the following are types of documentation

Question 17

The review of amounts charged to the company from a seller that it purchased from is called a:

Accepted Answer

A) Vendor audit 
B) Seller review 
C) Collusion 
D) Customer review 
A) Vendor audit 
B) Seller review 
C) Collusion 
D) Customer review

Question 18

A small, unauthorized program within a larger legitimate program, used to manipulate the computer system to conduct a fraud is referred to as a(n):

Accepted Answer

A) Trap door alteration 
B) Salami technique 
C) Trojan horse program 
D) Input manipulation 
A) Trap door alteration 
B) Salami technique 
C) Trojan horse program 
D) Input manipulation

Question 19

Factors that limit the effectiveness of internal controls include all of the following except:

Accepted Answer

A) Flawed judgment applied in decision making 
B) Human error 
C) Controls can be circumvented or ignored 
D) All of the above are factors that limit the effectiveness of internal controls 
A) Flawed judgment applied in decision making 
B) Human error 
C) Controls can be circumvented or ignored 
D) All of the above are factors that limit the effectiveness of internal controls

Question 20

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

Accepted Answer

A) Confidentiality 
B) Online privacy 
C) Security 
D) Availability 
A) Confidentiality 
B) Online privacy 
C) Security 
D) Availability

Which of the following is the most common method of detecting occupational fraud?

Which of the following would be considered a vendor fraud?

An example of Cash receipts fraud would include:

Circumstances that provide access to the assets or records that are the objects of the fraudulent activity describes which condition of the Fraud Triangle?

Which of the following objectives were not identified as necessary to be provided by an effective accounting system?

If an accounting supervisor were allowed to hire employees, approve the hours worked, prepare the paychecks, and deliver the paychecks, which of the categories of control activities would be violated?

The risk related to this category of Trust Services Principles could be inaccurate, incomplete, or improperly authorized information.

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

COSO describes five components of internal control.Which of the following terms is best described as "policies and procedures that help ensure management directives are carried out and management objectives are achieved"?

Examples of customer fraud include all of the following except:

The theft, concealment, and conversion of personal gain of another's money, physical assets, or information is termed:

Which of the following is NOT one of the three critical actions that a company can undertake to assist with fraud prevention and fraud detection?

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

Which of the following is not a common form of employee fraud?

The Sarbanes-Oxley act was passed in 2002 as a Congress's response to the many situations of fraudulent financial reporting discovered during 2001.The intention of the Act was:

A good system of internal control includes many types of documentation.Which of the following types of documentation is not part of the adequate records and documents category of internal control?

The review of amounts charged to the company from a seller that it purchased from is called a:

A small, unauthorized program within a larger legitimate program, used to manipulate the computer system to conduct a fraud is referred to as a(n):

Factors that limit the effectiveness of internal controls include all of the following except:

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters

Exam 3: Fraud, Ethics, and Internal Control

Which of the following is the most common method of detecting occupational fraud?

Which of the following would be considered a vendor fraud?

An example of Cash receipts fraud would include:

Circumstances that provide access to the assets or records that are the objects of the fraudulent activity describes which condition of the Fraud Triangle?

Which of the following objectives were not identified as necessary to be provided by an effective accounting system?

If an accounting supervisor were allowed to hire employees, approve the hours worked, prepare the paychecks, and deliver the paychecks, which of the categories of control activities would be violated?

The risk related to this category of Trust Services Principles could be inaccurate, incomplete, or improperly authorized information.

The authors presented their "picture" of internal control as a series of umbrellas which represent different types of controls.Which of the following is not one of those types of controls?

COSO describes five components of internal control.Which of the following terms is best described as "policies and procedures that help ensure management directives are carried out and management objectives are achieved"?

Examples of customer fraud include all of the following except:

The theft, concealment, and conversion of personal gain of another's money, physical assets, or information is termed:

Which of the following is NOT one of the three critical actions that a company can undertake to assist with fraud prevention and fraud detection?

This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of the control.

Which of the following is not a common form of employee fraud?

The Sarbanes-Oxley act was passed in 2002 as a Congress's response to the many situations of fraudulent financial reporting discovered during 2001.The intention of the Act was:

A good system of internal control includes many types of documentation.Which of the following types of documentation is not part of the adequate records and documents category of internal control?

The review of amounts charged to the company from a seller that it purchased from is called a:

A small, unauthorized program within a larger legitimate program, used to manipulate the computer system to conduct a fraud is referred to as a(n):

Factors that limit the effectiveness of internal controls include all of the following except:

The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company.

Introduction to AIS

Foundational Concepts of the AIS

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspurchases

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters