Question 1

is the ability of the perpetrator to relate to the potential co-conspirator.

Accepted Answer

A)   Expert power
B)   Legitimate power
C)   Referent power
D)   Reward power C

Question 2

What is the strongest factor in deterring future fraud activity?

Accepted Answer

A)   Legal prosecution
B)   Sanctions
C)   Termination
D)   Counseling A

Question 3

Most fraud perpetrators have profiles that look like:

Accepted Answer

A)   those of other honest people.
B)   those with criminal records.
C)   those who are uneducated.
D)   those who use alcohol and drugs. A

Question 4

Every fraud is comprised of all the following elements EXCEPT:

Accepted Answer

A)   the theft act.
B)   concealment.
C)   conversion.
D)   assault.

Question 5

Generally, internal controls are implemented in a corporation to help prevent which element of the fraud triangle?

Accepted Answer

A)   Perceived opportunity
B)   Perceived pressure
C)   Rationalization
D)   Authorization

Question 6

When fraud occurs, the most common reaction to those affected by the fraud is:

Accepted Answer

A)   anger.
B)   acceptance.
C)   denial.
D)   retribution.

Question 7

Which of the following is an example of a vice pressure?

Accepted Answer

A)   An expensive extramarital relationship
B)   An extravagant lifestyle
C)   Needing to appear successful
D)   Being offered a bribe

Question 8

Which of the following is NOT a primary control procedure to minimize the occurrence of fraud?

Accepted Answer

A)   Dual custody
B)   System of authorizations
C)   Internal audit department
D)   Documents and records

Question 9

Who do criminologists compare fraudsters to in relation to repeat offenses and why?

Accepted Answer

A)   Rapists. They repeat their crimes because they are not severely punished.
B)   Shoplifters. They steal goods frequently and in small quantities until they are confronted.
C)   Bank Robbers. They steal a lot of money from wealthy sources.
D)   Bank Tellers. They have access to a large amount of resources and they are perceived to be trustworthy people.

Question 10

Poor credit could become a that could lead to fraud.

Accepted Answer

A)   financial pressure
B)   social pressure
C)   family pressure
D)   financial threat

Question 11

When management fraud occurs, companies usually:

Accepted Answer

A)   overstate assets and net income.
B)   understate assets and net income.
C)   overstate assets and understate net income.
D)   understate assets and overstate net income.

Question 12

A fraud perpetrator is able to convince a potential victim that he will receive a large bonus if he supports him in a fraud scheme. Which type of power is the fraud perpetrator using?

Accepted Answer

A)   Expert power
B)   Coercive power
C)   Legitimate power
D)   Reward power

Question 13

Which of the following is usually the most expensive of all control procedures?

Accepted Answer

A)   Documents and records
B)   Segregation of duties
C)   System of authorizations
D)   Independent checks

Question 14

Documents and records are an important control activity. Which of the following statements concerning this activity is true?

Accepted Answer

A)   They serve as excellent preventive controls.
B)   Adequate accountability can exist even in their absence.
C)   The entire accounting system serves as a documentary control.
D)   They are poor detective controls.

Question 15

Studies show that in advanced countries, levels of honesty are:

Accepted Answer

A)   generally stable.
B)   increasing slightly and erratically.
C)   increasing at a steady rate.
D)   decreasing.

Question 16

Modeling and labeling are subcomponents of which fraud-related element of an organization?

Accepted Answer

A)   Control environment
B)   Accounting system
C)   Audit procedures
D)   Review procedures

Question 17

Which of the following is an example of an authorization control procedure?

Accepted Answer

A)   Password protection
B)   Periodic job rotation
C)   Cash counts or certifications
D)   Supervisor review

Question 18

Which of the following is NOT a true statement?

Accepted Answer

A)   Almost every fraud involves rationalization.
B)   All frauds involve financial or vice-related pressures.
C)   Perceived opportunity diminishes when fraud perpetrators are prosecuted.
D)   All of these statements are true.

Question 19

Which of the following is NOT a perceived pressure that can lead to employee fraud?

Accepted Answer

A)   Experiencing high medical bills because of illness in the family
B)   Frustration with work
C)   Anticipated actual financial reports that are below published expectations
D)   A challenge to beat the system

Question 20

According to Max Weber, is the probability that a person can carry out his or her own will despite resistance.

Accepted Answer

A)   power
B)   persuasion
C)   prejudice
D)   potency

Exam 2: Who Commits Fraud and Why