Deck 14: Conducting Investigations and Report Writing

Question 1

Of the following, which is the preferred method of organizing documentary evidence?

A) Chronological order
B) Alphabetical order
C) By witness
D) Order received

Answer 1

C

Question 2

Which of the following statements about handling and storing documentary evidence is not true?

A) Documents received should be initialed and dated by the fraud examiner.
B) The original document should be preserved for forensic examinations.
C) Photocopied documents should be stored in transparent plastic envelopes.
D) Documents should never be stapled or paper-clipped.

Answer 2

C

Question 3

While investigating an alleged conflict of interest scheme, Green, an internal investigator, is contacted by the ex-wife of Brown, the primary suspect. After calling her ex-husband some unsavory names and telling Green that Brown hasn't paid a dime of his court-ordered alimony, the jilted former spouse informs Green that she has some dirt on Brown. She tells Green that she'd be more than happy to spill the beans about Brown's misdeeds if Green can ensure that she receives half of any money recovered as a result of the investigation. Because Brown's ex-wife is clearly seeking a financial reward for supplying information, Green should discontinue speaking with her and should not rely on any information she provides.

Answer 3

False

Question 4

Officers and directors of companies are bound by the duties of _________ and _________ in overseeing the operations of their companies.

A) loyalty; reasonable care
B) due process; loyalty
C) reasonable care; imputed practice
D) loyalty; implicit care

Question 5

Able is a fraud examiner who works for XYZ, a private company. While investigating an allegation of employee embezzlement, Able calls Baker, a suspected co-conspirator, and pretends to be a member of the local police force. Able tells Baker that if he turns over his financial records to Able, that he will be provided immunity from prosecution. Is Able's use of impersonation in this situation legally acceptable?

A) Yes
B) No

Question 6

_________________ refers to establishing how and when a piece of evidence was received; how it was maintained or stored while in each person's possession; what changes, if any, it underwent in that person's custody; and how it left that person's custody.

A) Authentication
B) Forensic examination
C) Chain of custody
D) None of the above

Question 7

Which of the following factors should be considered when determining whether to employ outside consultants during a fraud examination engagement?

A) Company politics
B) The degree of expertise required for specific tasks
C) Potential threats of retaliation against internal investigators
D) All of the above

Question 8

Baker, CFE, is on a stakeout at the home of Potter, the prime suspect in a large false billing scheme. When Baker arrives at Potter's street, she notices Potter's garbage has been placed on the curb for pickup. Baker believes she could obtain much of the information she needs by going through Potter's garbage. In order to legally sift through Potter's trash and seize discarded documents to be used as evidence, Baker must:

A) Obtain a search warrant
B) Obtain a subpoena duces tecum
C) Obtain Potter's consent
D) None of the above

Question 9

Lloyd, CFE, has asked Betsy for access to her bank records as part of an investigation into an alleged embezzlement scheme. If Betsy agrees, her consent must be written, signed, and dated in order for it to be binding.

Question 10

To be valid, a search warrant must be issued by a judge and must be served by a law enforcement official.

Question 11

Which of the following statements is true regarding the use of undercover operations as part of a fraud examination?

A) Undercover operations are never legal and should not be used in fraud examinations.
B) Undercover operations should be used only if there is sufficient probable cause that a crime has been committed.
C) There are no restrictions governing the use of undercover operations as part of fraud investigations.
D) None of the above

Question 12

The failure to adequately investigate an allegation of employee fraud may be a violation of legal and regulatory requirements.

Question 13

When organizing documentary evidence, it is recommended that investigators keep which of the following?

A) Chronologies
B) To-do lists
C) A separate file for key documents
D) All of the above

Question 14

Fraud examination teams should be broken down into two segregated groups: one that focuses on the financial side of the investigation and one that performs the investigatory field work.

Question 15

_____________ involves obtaining information through the use of falsehoods or deception.

A) Pretexting
B) Subject manipulation
C) Forensic investigation
D) Surveillance

Question 16

If, during the handling of a piece of documentary evidence, an investigator inadvertently holds the document with bare hands and leaves fingerprints on it, the document should be destroyed and a new copy should be obtained.

Question 17

When choosing a fraud examination team, it is important to include as many parties as possible to ensure that all investigatory perspectives are covered.

Question 18

Jackson, CFE, is investigating a suspected embezzlement by one of XYZ Corp.'s employees. As part of this investigation, she is assembling a financial profile of the suspect. Among other things, she wants to know if the suspect has made any significant real estate purchases since the embezzlement scheme began. Information on real estate transactions such as deeds, grants, transfers, and mortgages is located:

A) With the county recorder
B) With the state tax assessor
C) With the secretary of state
D) With the U.S. Department of Land Management

Question 19

A company may need to undertake an internal investigation into alleged employee fraud for which of the following reasons?

A) To mitigate the company's vicarious liability for the wrongful conduct
B) To determine the source and amount of loss
C) To guard against wrongful termination accusations
D) All of the above

Question 20

In most cases, which of the following parties should be primarily responsible for directing a fraud examination?

A) The external auditors
B) The head of the security department
C) The company's legal counsel
D) The human resources manager

Question 21

Bob Taylor, CFE, is writing a report on his findings from an investigation into an alleged inventory larceny scheme. During his investigation, he was unable to accurately quantify the amount of the loss to the victim company, but he assumes that the loss falls between $100,000 and $200,000. In the report, Bob should report the amount of the loss as $200,000 so that the company can recoup as much money as possible from the perpetrator.

Question 22

To obtain information about an auto loan, such as where and when the loan originated and the current address of the debtor, an investigator should search the Uniform Commercial Code documents filed with the Secretary of State.

Question 23

In which section of the standard fraud examination report should the investigator discuss the identity and background information obtained about the individuals implicated in the matter under investigation?

A) Summary
B) Introduction
C) Body
D) Results

Question 24

In a written fraud examination report, the fraud examiner's conclusions about how the fraud occurred should be explicitly stated.

Question 25

McCloud, an internal investigator for a private company, has reason to believe that LaRue, the company's controller, has been embezzling cash and living the high life on the company's dime. McCloud has just discovered that LaRue bought a mansion on the edge of town last year and McCloud wants to find out more about the purchase. Information about whether LaRue took out a mortgage on the property may be found by searching:

A) LaRue's income tax return
B) County real property records
C) LaRue's bank account transactions
D) All of the above

Question 26

Which of the following information is typically not included in a corporate registration?

A) The location of the corporation's principal office
B) The tax returns and quarterly reports for the corporation
C) The names of the corporation's directors and officers
D) The date of incorporation

Question 27

A well-written, accurate, and understandable investigation report will:

A) Convey all pertinent evidence
B) Add credibility to the investigation
C) Accomplish the objectives of the case
D) All of the above

Question 28

Fraud examinations conclude with:

A) A conviction of the guilty party
B) A report of the investigation findings
C) A confession from the suspect
D) An opinion on the guilt or innocence of the implicated party

Question 29

To find the names of the parties who have an interest in the estate of a deceased individual, an investigator should search the records of which court?

A) County civil court
B) U.S. District court
C) Probate court
D) None of the above

Question 30

When preparing an investigative report, the fraud examiner should assume that it will be read by outside parties.

Question 31

Information concerning a corporation's name, ownership, stock value, initial shareholders, directors, and officers is registered and maintained at which of the following levels?

A) Federal
B) State
C) Municipal
D) County