Deck 7: The Fraud Investigation and Engagement Processes

Question 1

How many steps are there in the fraud investigation process?

A) 1
B) 2
C) 3
D) 4

Answer 1

D

Question 2

What are the four types of evidence collected in the evidence collection process?

A) Physical evidence, financial statement evidence, observational evidence, and interview evidence.
B) Physical evidence, documentary evidence, tip hotline evidence, and interview evidence.
C) Physical evidence, documentary evidence, observational evidence, and witness evidence.
D) Physical evidence, documentary evidence, observational evidence, and interview evidence.

Answer 2

D

Question 3

Which of the following is NOT a step in the fraud investigation process?

A) The in briefing process
B) The engagement process
C) The evidence collection process
D) The reporting process

Answer 3

A

Question 4

Which is a consideration for reporting a loss to the insurance carrier of the corporation?

A) Can the loss be absorbed into current net profits for the corporation?
B) Can personal assets of the accused be sold to recover the loss?
C) Has the corporation used all reasonable means to mitigate losses?
D) All of the above are considerations.

Question 5

Which of the following is a part of the fraud engagement process?

A) Provide a copy of the U.S. Code being investigated.
B) Provide an engagement letter or memorandum.
C) Provide an engagement letter or letter of Miranda.
D) Provide a bill of retainer for the costs of the investigation.

Question 6

For all fraud investigations, it is essential that a(n) ____________ be created.

A) Affidavit of findings
B) Unified case file
C) Sworn statement file
D) Working paper archive

Question 7

Some standard defenses include the following:

A) All of the below are possible standards of defense.
B) Someone else did it.
C) A hacker did it.
D) Those were simply errors and not fraudulent entries.

Question 8

Recovery through litigation means:

A) The corporation must pay the legal costs of the accused.
B) Both the plaintiff and defendant must pay a court fee for the proceedings.
C) The court may require the accused to pay if found guilty.
D) If found not guilty, the defendant may require legal fees be paid by the plaintiff.

Question 9

How many steps does the fraud engagement process involve?

A) 6
B) 8
C) 10
D) 6 to 12, depending upon law enforcements involvement

Question 10

The incident report contains:

A) All evidence that will need to be turned over to the defense during discovery.
B) Detailed working papers to prove the fraud.
C) The initial information used to justify the investigation.
D) A bench warrant for the accused.

Question 11

If the investigator is attempting to prove that a given fraud theory is correct but also attempting to prove that it is not correct, he is engaging in:

A) Double Jeopardy
B) Proving beyond a reasonable doubt
C) Double crossing
D) Reverse proof

Question 12

The fraud investigation process involves:

A) Quarterly gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud.
B) Annually gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud.
C) Periodically gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud.
D) Systematically gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud.

Question 13

Which of the following is a step in the fraud-theory approach?

A) Prove the hypotheses invalid.
B) Refine and amend the hypotheses.
C) Link the hypotheses to a GAAP.
D) None of the above are a step in the fraud-theory approach.

Question 14

When does the fraud investigation engagement process end?

A) With first contact to an organization.
B) After a 12-month follow-up audit
C) With a complete agreement regarding the fraud-investigation services to be provided by the investigator.
D) Upon conviction of a criminal.

Question 15

An example of Loss Mitigation would be:

A) Filing for an injunction with a U.S. Circuit Court.
B) Confronting the employee(s) involved prior to the investigation.
C) Notifying the insurance company covering corporate losses due to theft or fraud.
D) The corporation taking immediate action to prevent additional loss to the company.

Question 16

When does the fraud investigation engagement process begin?

A) With first contact to an organization.
B) After a 12-month follow-up audit
C) With a complete agreement regarding the fraud-investigation services to be provided by the investigator.
D) Upon conviction of a criminal.

Question 17

Which of the following is NOT a legal issue to consider prior to a fraud investigation?

A) Rights of workers or other suspects under investigation.
B) The possibility of conducting the investigation under attorney-client privilege.
C) Possible illegal activities by the corporation itself.
D) Rights of investigating employers.

Question 18

If law enforcement is called during an investigation, then:

A) Law enforcement will take over the investigation and the business will be forced to comply with whatever demands they have.
B) There may still be some give and take as to what the process will be.
C) The fraud investigator will serve as the liaison between law enforcement and the business.
D) Law enforcement will not be called during a fraud investigation because District Attorneys are the sole legal enforcement agent for any fraud crime.

Question 19

The reporting process involves:

A) Video recording and summarizing the results of the fraud investigation.
B) Documenting and summarizing the results of the civil litigation.
C) Documenting and summarizing the results of the fraud investigation.
D) A formal out brief to the Executives of the Corporation outlining the fraud discovered.

Question 20

During the fraud investigation process, it is important to remember:

A) To never exceed the amount of billable hours authorized under GAAP.
B) The fraud investigator is not law enforcement and cannot provide evidence in a trial. C The rights of the victim as well as the accused.
D) To limit the investigation to the U.S. Code that has been violated.

Question 21

While considering legal issues prior to beginning a fraud examination, what are three considerations?

Question 22

What are some other items that are acceptable to be billed as part of the investigation?

A) All of the below are acceptable.
B) Meals
C) Travel
D) Phone charges

Question 23

Within the interview process, explain the steps involved and if the interviews should begin or end with those farthest away from the fraud.

Question 24

If an investigator is asked to provide a copy of their report to a 3^rd party, such as law enforcement, what should they do first?

A) Have company counsel review the documents to ensure no proprietary information is being released.
B) Obtain written authorization from the company that hired them first.
C) Ensure law enforcement is going to arrest the fraudster first.
D) Ask the 3^rd party to provide a written authorization from the company.

Question 25

When using client employees to assist in the investigation, what must be considered?

A) That the employee is a part of the fraud being committed.
B) That the employee be placed on the payroll of the investigating firm.
C) That the employee themselves are not part of the fraud being committed.
D) That the employee should perform the investigation work from home or another office.

Question 26

Possible objectives of a fraud investigation might include:

A) All of these
B) Make an example of a fraudster
C) Minimize any embarrassing disclosures in the press
D) Punish the fraudster

Question 27

Explain what a Unified Case File is and its three main purposes.

Question 28

What are the four types of evidence that are gathered in the evidence collection process?

Question 29

Describe the fraud investigation process.

Question 30

What are some other services that may be provided during a fraud investigation?

A) Advice on guilt or innocence.
B) Advice on improving business processes or controls.
C) Advice on informing insurance carriers.
D) Advice on new markets to explore.

Question 31

Describe the Objectives and Scope of the Investigation that may be stated in an engagement letter.

Question 32

While considering reverse proof, what are four standards of defense that a fraudster may counter charges with?

Question 33

Outline the fraud engagement process.

Question 34

An initial decision must be made as to whether it is necessary to immediately intervene to prevent the perpetrator from continuing with the fraud scheme. What is this concept called and what are examples of ways to begin it?

Question 35

Mediation and arbitration are conducted where and how are they disclosed?

A) In a U.S. District Court and do not enter into the public record.
B) In private and do not enter into the public record.
C) In a State Supreme Court and are entered into the public record.
D) In private and enter into the public record if there is an admission of guilt by the fraudster.

Question 36

How are the professional fees typically billed during an investigation?

A) Weekly
B) As a percentage of potential fraud prevented.
C) When there has been an arrest.
D) Monthly

Question 37

Who can become a fraud investigator within a company and what is their engagement process?

Question 38

What are the two main reasons that independent investigator will not draw conclusions regarding guilt or innocence?

A) Investigators are not deputized and have not earned a law degree.
B) Guilt and innocence are generally a matter of opinion and opinion regarding guilt could open up the investigator to a law suit for defamation.
C) Guilt and innocence are facts of matter and investigators will hand their findings over to law enforcement.
D) None of the above are reasons.

Question 39

The scope of the investigation serves to:

A) Place limits on the objectives of the investigation.
B) Expand on the investigation if other fraud is found.
C) Place limits on the breadth of the investigation.
D) Contract the focus of the investigation.

Question 40

Which of the following is NOT a method to be used in a fraud investigation?

A) Covert surveillance of employees at home
B) Reviews of documents
C) Interviews with employees
D) Surreptitious surveillance of employees

Question 41

An incident report and a unified case file are the same thing.

Question 42

Fraud investigations can be time consuming and expensive.

Question 43

The fraud engagement process is a part of the fraud investigation process.

Question 44

Reverse proof means that the investigator must consider the evidence for both sides.

Question 45

The investigator should never tell the fraudster to make restitution or she will report the fraudster to law enforcement.

Question 46

There is a Constitutional Amendment that requires law enforcement to investigate all fraud allegations.

Question 47

The fraud investigation engagement process is a series of steps that begins at the time of the investigator's first contact with the case and ends with a conviction or plea bargin.

Question 48

Part of the fraud investigation process involves filing charges with a District Attourney.

Question 49

An investigator should always remain a part of the investigation, even if it means they will have to commit an illegal act.

Question 50

The first and primary objective in a fraud investigation is to punish the fraudster.