Question 1

Identify a recent business trend that could be contributing to the increased number of collusive frauds.

Accepted Answer

A) Reducing costs and product quality by using same suppliers. 
B) Advances in technology that simplify the process of conducting business. 
C) Increasing frequency of supplier alliances, and closer relationships between buyers and suppliers. 
D) Increased competition amongst suppliers. 
A) Reducing costs and product quality by using same suppliers. 
B) Advances in technology that simplify the process of conducting business. 
C) Increasing frequency of supplier alliances, and closer relationships between buyers and suppliers. 
D) Increased competition amongst suppliers. C

Question 2

Which of the following explains the Pygmalion effect?

Accepted Answer

A) Employees who commit fraud are likely to do so more than once. 
B) The probability of fraud detection increases with the number of people involved. 
C) People generally perform according to a leader's expectations. 
D) Absence of controls leads to increased incidents of dishonesty. 
A) Employees who commit fraud are likely to do so more than once. 
B) The probability of fraud detection increases with the number of people involved. 
C) People generally perform according to a leader's expectations. 
D) Absence of controls leads to increased incidents of dishonesty. C

Question 3

​Which of the following indicates proactive fraud auditing?

Accepted Answer

A) ​creating an awareness among employees that their actions can be reviewed at any time 
B) ​establishing controls to discourage collusion between employees 
C) creating an expectation of punishment for a fraud act. 
D) ​establishing a system of segregation of duties throughout the organization 
A) ​creating an awareness among employees that their actions can be reviewed at any time 
B) ​establishing controls to discourage collusion between employees 
C) creating an expectation of punishment for a fraud act. 
D) ​establishing a system of segregation of duties throughout the organization A

Question 4

​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 5

Identify a situation that could usually lead to a conflict of interest.

Accepted Answer

A) A manager has to choose between two of his best employees for the post of assistant manager. 
B) A sales supervisor has to allocate targets to her team members, based on revenue generation probability per region. 
C) A market analyst is asked to create a comparative growth forecast for four firms in an industry. 
D) A purchase manager in a company runs an operation that produces the raw materials required by the company. 
A) A manager has to choose between two of his best employees for the post of assistant manager. 
B) A sales supervisor has to allocate targets to her team members, based on revenue generation probability per region. 
C) A market analyst is asked to create a comparative growth forecast for four firms in an industry. 
D) A purchase manager in a company runs an operation that produces the raw materials required by the company.

Question 6

An organization requires that employees in its accounting department take mandatory two-week long continuous vacations once a year.It allows no exceptions to this rule.Which control activity is the company using?

Accepted Answer

A) Segregation of duties 
B) Proper authorizations 
C) Physical safeguards 
D) Independent checks 
A) Segregation of duties 
B) Proper authorizations 
C) Physical safeguards 
D) Independent checks

Question 7

One of the most important responsibilities of an employer is the hiring and retention of employees.Which situation below reflects the current market scenario?

Accepted Answer

A) High turnover, high loyalty 
B) High turnover, low loyalty 
C) Low turnover, high loyalty 
D) Low turnover, low loyalty 
A) High turnover, high loyalty 
B) High turnover, low loyalty 
C) Low turnover, high loyalty 
D) Low turnover, low loyalty

Question 8

The correct order of the six elements of the fraud fighting model is:

Accepted Answer

A) Tone at the Top; Education and Training; Proactive Detection; Integrity Risk and Controls; Reporting and Monitoring; Investigation and Follow-up. 
B) Tone at the Top; Education and Training; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up. 
C) Education and Training; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up; Tone at the Top. 
D) Education and Training; Tone at the Top; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up. 
A) Tone at the Top; Education and Training; Proactive Detection; Integrity Risk and Controls; Reporting and Monitoring; Investigation and Follow-up. 
B) Tone at the Top; Education and Training; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up. 
C) Education and Training; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up; Tone at the Top. 
D) Education and Training; Tone at the Top; Integrity Risk and Controls; Reporting and Monitoring; Proactive Detection; Investigation and Follow-up.

Question 9

Preventive controls that provide early fraud detection opportunity include:

Accepted Answer

A) independent checks. 
B) segregation of duties. 
C) documents and records. 
D) financial statement reviews 
A) independent checks. 
B) segregation of duties. 
C) documents and records. 
D) financial statement reviews

Question 10

____ focuses more on creating a culture of openness than eliminating opportunities.

Accepted Answer

A) Proactive auditing 
B) Installing good internal controls 
C) Monitoring employees 
D) Creating a positive work environment 
A) Proactive auditing 
B) Installing good internal controls 
C) Monitoring employees 
D) Creating a positive work environment

Question 11

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 12

Which of the following is an operating condition that can contribute to a higher risk of fraud is?

Accepted Answer

A) management by crisis 
B) high company loyalty 
C) flexible rules 
D) proper authorization 
A) management by crisis 
B) high company loyalty 
C) flexible rules 
D) proper authorization

Question 13

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 type 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 type of control activities include reactive controls and proactive controls.

Question 14

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 15

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.

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

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 18

Fraud is most commonly detected by:

Accepted Answer

A) monitoring employees. 
B) auditors. 
C) discouraging collusion. 
D) tips and complaints. 
A) monitoring employees. 
B) auditors. 
C) discouraging collusion. 
D) tips and complaints.

Question 19

Which of the following is NOT an indicator that a person with a salary of $50,000 per year is living above his or her lifestyle?

Accepted Answer

A) A person owns several expensive cars. 
B) A person closely monitors his/her investments. 
C) A person who hosts extravagant parties in their home. 
D) A person who owns a valuable art collection. 
A) A person owns several expensive cars. 
B) A person closely monitors his/her investments. 
C) A person who hosts extravagant parties in their home. 
D) A person who owns a valuable art collection.

Question 20

​What is a purpose of proactive fraud auditing?

Accepted Answer

A) ​It creates an atmosphere of distrust between and among employees. 
B) ​Its purpose is to deter employees from committing fraud. 
C) ​It provides ways for employees to deal with personal pressures. 
D) ​It eliminates collusion as a means of committing fraud. 
A) ​It creates an atmosphere of distrust between and among employees. 
B) ​Its purpose is to deter employees from committing fraud. 
C) ​It provides ways for employees to deal with personal pressures. 
D) ​It eliminates collusion as a means of committing fraud.

Identify a recent business trend that could be contributing to the increased number of collusive frauds.

Which of the following explains the Pygmalion effect?

Which of the following indicates proactive fraud auditing?

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

Identify a situation that could usually lead to a conflict of interest.

An organization requires that employees in its accounting department take mandatory two-week long continuous vacations once a year.It allows no exceptions to this rule.Which control activity is the company using?

One of the most important responsibilities of an employer is the hiring and retention of employees.Which situation below reflects the current market scenario?

The correct order of the six elements of the fraud fighting model is:

Preventive controls that provide early fraud detection opportunity include:

____ focuses more on creating a culture of openness than eliminating opportunities.

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

Which of the following is an operating condition that can contribute to a higher risk of fraud is?

Which of the following observations is true?

What is the most widely recognized way to deter fraud?

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

What does the acronym "EAP" stand for?

Fraud is most commonly detected by:

Which of the following is NOT an indicator that a person with a salary of $50,000 per year is living above his or her lifestyle?

What is a purpose of proactive fraud auditing?

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

Identify a recent business trend that could be contributing to the increased number of collusive frauds.

Which of the following explains the Pygmalion effect?

​Which of the following indicates proactive fraud auditing?

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

Identify a situation that could usually lead to a conflict of interest.

An organization requires that employees in its accounting department take mandatory two-week long continuous vacations once a year.It allows no exceptions to this rule.Which control activity is the company using?

One of the most important responsibilities of an employer is the hiring and retention of employees.Which situation below reflects the current market scenario?

The correct order of the six elements of the fraud fighting model is:

Preventive controls that provide early fraud detection opportunity include:

____ focuses more on creating a culture of openness than eliminating opportunities.

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

Which of the following is an operating condition that can contribute to a higher risk of fraud is?

Which of the following observations is true?

What is the most widely recognized way to deter fraud?

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

What does the acronym "EAP" stand for?

Fraud is most commonly detected by:

Which of the following is NOT an indicator that a person with a salary of $50,000 per year is living above his or her lifestyle?

​What is a purpose of proactive fraud auditing?

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

Which of the following indicates proactive fraud auditing?

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

What is a purpose of proactive fraud auditing?