Question 1

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 2

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

Accepted Answer

A) Rigid rules followed by the organization 
B) Managers who don't care about or pay attention to honesty 
C) Autocratic or dictatorial management 
D) Having positive personnel and operating procedures 
A) Rigid rules followed by the organization 
B) Managers who don't care about or pay attention to honesty 
C) Autocratic or dictatorial management 
D) Having positive personnel and operating procedures

Question 3

In order to detect fraud at the earliest,a manager should pay attention to:

Accepted Answer

A) present lifestyle. 
B) past conduct. 
C) attitude toward work. 
D) absenteeism. 
A) present lifestyle. 
B) past conduct. 
C) attitude toward work. 
D) absenteeism.

Question 4

Company X has a clearly communicated code of ethics and a whistle-blowing program.Sara used the whistle-blowing system to alert the management about a fraud being committed by a senior employee in the human resource department.The company investigated the allegation and punished the fraudster.However,Sara was shocked to find later that everyone in her team knew that she was the one who blew the whistle.What could be a major issue with the program at the company?

Accepted Answer

A) Unclear policies 
B) Lack of awareness about the program 
C) Management inaction 
D) Lack of anonymity 
A) Unclear policies 
B) Lack of awareness about the program 
C) Management inaction 
D) Lack of anonymity

Question 5

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 only employees were supposed to know about the fraud. 
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 only employees were supposed to know about the fraud.

Question 6

What is the last stage in the current (default)model that most organizations typically use for dealing with fraud?

Accepted Answer

A) Fraud incident 
B) Resolution 
C) Investigation 
D) Action 
A) Fraud incident 
B) Resolution 
C) Investigation 
D) Action

Question 7

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 8

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 absolute assurance that all 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 absolute assurance that all fraud will be prevented. 
D) The type of control activities include reactive controls and proactive controls.

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) lack of proper authorization 
A) independent checks. 
B) segregation of duties. 
C) documents and records. 
D) lack of proper authorization

Question 10

Who has the primary responsibility for establishing and maintaining good internal controls?

Accepted Answer

A) Primary responsibility for controls belongs to internal auditors.They are the ones who create the controls and investigate potential violations of the controls. 
B) Primary responsibility rests with management.Management both conveys acceptable culture and has the final say in how fraud cases are treated. 
C) Primary responsibility lies with employees.They are the ones most likely to witness violations and are responsible to watch for those violations. 
D) Primary responsibility is not attributable to one person or group of people within an organization.Each member of an organization must consider himself or herself personally responsible for the organization's control environment. 
A) Primary responsibility for controls belongs to internal auditors.They are the ones who create the controls and investigate potential violations of the controls. 
B) Primary responsibility rests with management.Management both conveys acceptable culture and has the final say in how fraud cases are treated. 
C) Primary responsibility lies with employees.They are the ones most likely to witness violations and are responsible to watch for those violations. 
D) Primary responsibility is not attributable to one person or group of people within an organization.Each member of an organization must consider himself or herself personally responsible for the organization's control environment.

Question 11

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 12

Which of the following should be emphasized in an employee-reporting program?

Accepted Answer

A) II and III. 
B) I,II,III,and IV. 
C) I,II,and IV. 
D) II and IV. 
A) II and III. 
B) I,II,III,and IV. 
C) I,II,and IV. 
D) II and IV.

Question 13

Which of the following observations concerning collusive frauds is true?

Accepted Answer

A) They are usually slower to develop than frauds committed by one individual. 
B) Research indicates that majority of the frauds involve collusion. 
C) Frauds involving collusion are usually the easiest to detect because of the involvement of multiple players. 
D) Recent trends in business have dramatically decreased the number of collusive frauds. 
A) They are usually slower to develop than frauds committed by one individual. 
B) Research indicates that majority of the frauds involve collusion. 
C) Frauds involving collusion are usually the easiest to detect because of the involvement of multiple players. 
D) Recent trends in business have dramatically decreased the number of collusive frauds.

Question 14

____ 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 15

What is the most widely recognized way to deter fraud?

Accepted Answer

A) Interview every employee on a regular basis. 
B) Implement a good system of controls. 
C) Keep management involved in company procedures. 
D) Threaten employees that on being caught,he/she will be fired. 
A) Interview every employee on a regular basis. 
B) Implement a good system of controls. 
C) Keep management involved in company procedures. 
D) Threaten employees that on being caught,he/she will be fired.

Question 16

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

Accepted Answer

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

Question 17

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 18

A "right-to-audit" clause:

Accepted Answer

A) provide rights to the vendor to audit the company's books at any time. 
B) gives an external auditor the right to audit the company's books. 
C) should not be used because it isn't an effective tool in fraud investigation. 
D) alerts vendors that the company reserves the right to audit the vendor's books at any time. 
A) provide rights to the vendor to audit the company's books at any time. 
B) gives an external auditor the right to audit the company's books. 
C) should not be used because it isn't an effective tool in fraud investigation. 
D) alerts vendors that the company reserves the right to audit the vendor's books at any time.

Question 19

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 20

The _____ is the overall tone of the organization that management establishes through its modeling and labeling,organization,communication,and other activities.

Accepted Answer

A) detection framework 
B) risk mitigation channel 
C) support network 
D) control environment 
A) detection framework 
B) risk mitigation channel 
C) support network 
D) control environment

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

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

In order to detect fraud at the earliest,a manager should pay attention to:

What is the last stage in the current (default)model that most organizations typically use for dealing with fraud?

What does the acronym "EAP" stand for?

Which of the following observations is true?

Preventive controls that provide early fraud detection opportunity include:

Who has the primary responsibility for establishing and maintaining good internal controls?

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

Which of the following should be emphasized in an employee-reporting program?

Which of the following observations concerning collusive frauds is true?

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

What is the most widely recognized way to deter fraud?

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?

A "right-to-audit" clause:

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

The _____ is the overall tone of the organization that management establishes through its modeling and labeling,organization,communication,and other activities.

The Nature of Fraud

Why People Commit Fraud

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

Fraud in E-Commerce

Legal Follow-Up

Filters

Exam 4: Preventing Fraud

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

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

In order to detect fraud at the earliest,a manager should pay attention to:

What is the last stage in the current (default)model that most organizations typically use for dealing with fraud?

What does the acronym "EAP" stand for?

Which of the following observations is true?

Preventive controls that provide early fraud detection opportunity include:

Who has the primary responsibility for establishing and maintaining good internal controls?

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

Which of the following should be emphasized in an employee-reporting program?

Which of the following observations concerning collusive frauds is true?

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

What is the most widely recognized way to deter fraud?

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?

A "right-to-audit" clause:

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

The _____ is the overall tone of the organization that management establishes through its modeling and labeling,organization,communication,and other activities.

The Nature of Fraud

Why People Commit Fraud

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

Fraud in E-Commerce

Legal Follow-Up

Filters