Question 1

_____ are relationships in financial or nonfinancial data that do not make sense,such as an unreasonable change in a volume,mix,or price.

Accepted Answer

A) Analytical anomalies 
B) Accounting anomalies 
C) Auditing anomalies 
D) Control weaknesses 
A) Analytical anomalies 
B) Accounting anomalies 
C) Auditing anomalies 
D) Control weaknesses A

Question 2

______ fraud symptoms are procedures or relationships that are unusual or too unrealistic to be believable.

Accepted Answer

A) Analytical 
B) Accounting 
C) Internal control 
D) Environmental 
A) Analytical 
B) Accounting 
C) Internal control 
D) Environmental A

Question 3

Which of the following is a highly suspicious financial statement relationship?

Accepted Answer

A) Increased revenues with increased cash flows 
B) Increased volume with decreased cost per unit 
C) Increased inventory with decreased payables 
D) Increased inventory with increased warehousing costs 
A) Increased revenues with increased cash flows 
B) Increased volume with decreased cost per unit 
C) Increased inventory with decreased payables 
D) Increased inventory with increased warehousing costs C

Question 4

Fraud occurs when perceived pressure,perceived opportunity and rationalization combine.Which of the following is related to the problem of segregation of duties?

Accepted Answer

A) Julie writes expense checks and Mark collects cash from customers. 
B) Bob order office supplies and deposits the company's checks. 
C) Steve records receivables and writes off bad debts. 
D) Rebecca records journal entries and orders lunch. 
A) Julie writes expense checks and Mark collects cash from customers. 
B) Bob order office supplies and deposits the company's checks. 
C) Steve records receivables and writes off bad debts. 
D) Rebecca records journal entries and orders lunch.

Question 5

Which of the following fraud symptoms are often the easiest to detect?

Accepted Answer

A) Analytical anomalies 
B) Internal control weaknesses 
C) Accounting anomalies 
D) Lifestyle changes 
A) Analytical anomalies 
B) Internal control weaknesses 
C) Accounting anomalies 
D) Lifestyle changes

Question 6

All transactions related to specific accounts,such as cash or inventory,are summarized in a:

Accepted Answer

A) Journal 
B) Ledger 
C) Trial balance 
D) Balance sheet 
A) Journal 
B) Ledger 
C) Trial balance 
D) Balance sheet

Question 7

Which of the following is a highly suspicious financial statement relationship?

Accepted Answer

A) Increased revenues with decreased inventory. 
B) Decreased production with decreased scrap. 
C) Increased revenues with increased receivables 
D) Decreased cost per unit with increased level of output 
A) Increased revenues with decreased inventory. 
B) Decreased production with decreased scrap. 
C) Increased revenues with increased receivables 
D) Decreased cost per unit with increased level of output

Question 8

Which of the following is not a fraud symptom related to internal control weaknesses?

Accepted Answer

A) Lack of segregation of duties 
B) Lack of physical safeguards 
C) Inadequate accounting system 
D) Lack of proper authorization 
E) Excessive turnover of executives 
A) Lack of segregation of duties 
B) Lack of physical safeguards 
C) Inadequate accounting system 
D) Lack of proper authorization 
E) Excessive turnover of executives

Question 9

Document symptoms to some extent can signal out that embezzlement is taking place.Which among the following usually do NOT point to some problem with the source documents?

Accepted Answer

A) Photocopied documents 
B) Different names or addresses of payees or customers 
C) Excessive voids or credits 
D) Increased past-due accounts 
A) Photocopied documents 
B) Different names or addresses of payees or customers 
C) Excessive voids or credits 
D) Increased past-due accounts

Question 10

How does a smart embezzler manipulate accounting records to conceal fraud?

Accepted Answer

A) By increasing assets. 
B) By manipulating stock accounts. 
C) By manipulating dividends. 
D) By increasing expenses. 
A) By increasing assets. 
B) By manipulating stock accounts. 
C) By manipulating dividends. 
D) By increasing expenses.

Question 11

Transactions happening at odd times or places;being performed by people who would not normally participate;or including odd procedures are typically associated with which type of fraud symptom?

Accepted Answer

A) Accounting anomaly 
B) Internal control weakness 
C) Analytical anomaly 
D) Unusual behavior 
A) Accounting anomaly 
B) Internal control weakness 
C) Analytical anomaly 
D) Unusual behavior

Question 12

Which of the following is NOT an analytical fraud symptom?

Accepted Answer

A) Consistent cash shortages 
B) Overriding of existing controls 
C) Excess purchases 
D) Unreasonably high expenses 
A) Consistent cash shortages 
B) Overriding of existing controls 
C) Excess purchases 
D) Unreasonably high expenses

Question 13

In which stage do auditors have a good chance of detecting fraud,if the audit samples include altered documents and miscounts?

Accepted Answer

A) Theft act 
B) Concealment 
C) Conversion 
D) Layering 
A) Theft act 
B) Concealment 
C) Conversion 
D) Layering

Question 14

Generally,at the conversion stage,________ are definitely not in the best position to detect fraud.

Accepted Answer

A) co-workers 
B) friends 
C) auditors 
D) managers 
A) co-workers 
B) friends 
C) auditors 
D) managers

Question 15

Which name refers to people who commit a fraud or another crime once in a while and does not feel stress?

Accepted Answer

A) Altruists 
B) Utilitarians 
C) Psychopaths 
D) Agnostics 
A) Altruists 
B) Utilitarians 
C) Psychopaths 
D) Agnostics

Question 16

There are three simple procedures that small business owners should do on a timely basis to prevent fraud when they can't afford sufficient employees to guarantee effective segregation of duties..Which of the following is NOT one among them?

Accepted Answer

A) Pay everything by check so that there is a record. 
B) Always open the bank statement and reconcile it themselves. 
C) Allow one key employee to operate the bank account personally. 
D) Sign every check themselves and not delegate the signing to anyone else. 
A) Pay everything by check so that there is a record. 
B) Always open the bank statement and reconcile it themselves. 
C) Allow one key employee to operate the bank account personally. 
D) Sign every check themselves and not delegate the signing to anyone else.

Question 17

Which of the following appears to be common to most embezzlers who are caught?

Accepted Answer

A) Long-term focus 
B) Investments made in low-risk instruments 
C) Saving what they steal 
D) Spending on lifestyle improvements 
A) Long-term focus 
B) Investments made in low-risk instruments 
C) Saving what they steal 
D) Spending on lifestyle improvements

Question 18

Which of the following scenarios is least conducive to fraud?

Accepted Answer

A) Outstanding bills at home 
B) Mandatory vacation time 
C) Economic downturns 
D) Moral decay in upper management 
A) Outstanding bills at home 
B) Mandatory vacation time 
C) Economic downturns 
D) Moral decay in upper management

Question 19

An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.The above statement symbolizes which fraud symptom?

Accepted Answer

A) Accounting anomaly 
B) Internal control weakness 
C) Analytical anomaly 
D) Unusual behavior 
A) Accounting anomaly 
B) Internal control weakness 
C) Analytical anomaly 
D) Unusual behavior

Question 20

What does the following journal entry indicate? Legal Expense..................2,900
Cash...............................2,900

Accepted Answer

A) $2,900 cash is due to an attorney. 
B) A sum of $2,900 was received from attorney in advance. 
C) $2,900 cash is due from an attorney. 
D) An attorney was paid $2,900 in cash. 
A) $2,900 cash is due to an attorney. 
B) A sum of $2,900 was received from attorney in advance. 
C) $2,900 cash is due from an attorney. 
D) An attorney was paid $2,900 in cash.

_____ are relationships in financial or nonfinancial data that do not make sense,such as an unreasonable change in a volume,mix,or price.

______ fraud symptoms are procedures or relationships that are unusual or too unrealistic to be believable.

Which of the following is a highly suspicious financial statement relationship?

Fraud occurs when perceived pressure,perceived opportunity and rationalization combine.Which of the following is related to the problem of segregation of duties?

Which of the following fraud symptoms are often the easiest to detect?

All transactions related to specific accounts,such as cash or inventory,are summarized in a:

Which of the following is a highly suspicious financial statement relationship?

Which of the following is not a fraud symptom related to internal control weaknesses?

Document symptoms to some extent can signal out that embezzlement is taking place.Which among the following usually do NOT point to some problem with the source documents?

How does a smart embezzler manipulate accounting records to conceal fraud?

Transactions happening at odd times or places;being performed by people who would not normally participate;or including odd procedures are typically associated with which type of fraud symptom?

Which of the following is NOT an analytical fraud symptom?

In which stage do auditors have a good chance of detecting fraud,if the audit samples include altered documents and miscounts?

Generally,at the conversion stage,________ are definitely not in the best position to detect fraud.

Which name refers to people who commit a fraud or another crime once in a while and does not feel stress?

There are three simple procedures that small business owners should do on a timely basis to prevent fraud when they can't afford sufficient employees to guarantee effective segregation of duties..Which of the following is NOT one among them?

Which of the following appears to be common to most embezzlers who are caught?

Which of the following scenarios is least conducive to fraud?

An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.The above statement symbolizes which fraud symptom?

What does the following journal entry indicate? Legal Expense..................2,900 Cash...............................2,900

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: an Overview

Preventing 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

Fraud in E-Commerce

Legal Follow-Up

Filters

Exam 5: Recognizing the Symptoms of Fraud

_____ are relationships in financial or nonfinancial data that do not make sense,such as an unreasonable change in a volume,mix,or price.

______ fraud symptoms are procedures or relationships that are unusual or too unrealistic to be believable.

Which of the following is a highly suspicious financial statement relationship?

Fraud occurs when perceived pressure,perceived opportunity and rationalization combine.Which of the following is related to the problem of segregation of duties?

Which of the following fraud symptoms are often the easiest to detect?

All transactions related to specific accounts,such as cash or inventory,are summarized in a:

Which of the following is a highly suspicious financial statement relationship?

Which of the following is not a fraud symptom related to internal control weaknesses?

Document symptoms to some extent can signal out that embezzlement is taking place.Which among the following usually do NOT point to some problem with the source documents?

How does a smart embezzler manipulate accounting records to conceal fraud?

Transactions happening at odd times or places;being performed by people who would not normally participate;or including odd procedures are typically associated with which type of fraud symptom?

Which of the following is NOT an analytical fraud symptom?

In which stage do auditors have a good chance of detecting fraud,if the audit samples include altered documents and miscounts?

Generally,at the conversion stage,________ are definitely not in the best position to detect fraud.

Which name refers to people who commit a fraud or another crime once in a while and does not feel stress?

There are three simple procedures that small business owners should do on a timely basis to prevent fraud when they can't afford sufficient employees to guarantee effective segregation of duties..Which of the following is NOT one among them?

Which of the following appears to be common to most embezzlers who are caught?

Which of the following scenarios is least conducive to fraud?

An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.The above statement symbolizes which fraud symptom?

What does the following journal entry indicate? Legal Expense..................2,900 Cash...............................2,900

The Nature of Fraud

Why People Commit Fraud

Fighting Fraud: an Overview

Preventing 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

Fraud in E-Commerce

Legal Follow-Up

Filters