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LSU ACCT 4235 - Fraud - Exam 1 (Ch
1-7)questions with answers
Why does fraud seem to be increasing at such an alarming rate? a. Computers, the internet, & technology make fraud easier to commit b. most frauds today are detected, whereas in the past many were not c. a new law requires that fraud be reported within 24 hours d. people understand the consequences of fraud to organizaitons - CORRECT ANSWERS โโA What of the following is NOT an important element of fraud? a. confidence b. deception c. trickery d. intelligence - CORRECT ANSWERS โโD Fraud is considered to be: a. a serious problem that continues to grow b. a problem that affects very few individuals c. a mild problem that most businesses need not worry about d. a problem under control - CORRECT ANSWERS โโA
People who commit fraud are usually: a. new employees b. not well groomed and have long hair and tattoos c. people with strong personalities d. trusted individuals - CORRECT ANSWERS โโD "The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets" is the definition of which of the following types of fraud? a. employee embezzlement or occupational fraud b. investment scams c. management fraud d. vendor fraud - CORRECT ANSWERS โโA Corporate employee fraud-fighters: a. work as postal inspectors and law enforcement officialsB b. prevent, detect, & investigate fraud within a company c. are lawyers who defend and/or prosecute fraud cases d. none of the abovw - CORRECT ANSWERS โโB Investment scams most often include: a. an action by top management against employees b. worthless investments or assets sold to unsuspecting investors c. an overcharge for purchased goods
a. FBI agencies b. health agencies c. insurance organizations d. fraud perpetrators - CORRECT ANSWERS โโD Which of the following statements is true? a. on a per-incident basis, bank robberies are most costly than frauds b. fraud is often labeled the fastest growing type of crime c. FBI agencies usually investigate frauds that occur within organizations c. none of the above statements are true - CORRECT ANSWERS โโB Which of the following is NOT an element of fraud? a. false representation b. accidental behavior c. damage to a victim d. intentional or reckless behavior - CORRECT ANSWERS โโB What is the best way to minimize fraud expense within an organization? a. effective early detection of fraud b. effective investigation of fraudulent behavior c. effective prevention of fraud d. effective research of fraud - CORRECT ANSWERS โโC
What is the most important element in successful fraud schemes? a. promised benefits b confidence in the perpetrator c. profitable activities d. complexity - CORRECT ANSWERS โโB Which of the following characters is LEAST likely to be involved in a fraud? a. a middle-aged person with middle management position b. a long-haired teenager c. a recent college graduate d. a senior executive who has significant stock options - CORRECT ANSWERS โโB Which of the following is NOT a common type of fraud? a. direct employee embezzlement b. employee bribes c. executives embezzling from petty cash d. investment scams - CORRECT ANSWERS โโC Which of the following is NOT a form of vendor fraud? a. overcharging for purchased goods b. shipment of inferior goods c. nonshipment of goods even though payment has been made
c. a vendor bills for goods not provided d. a vendor has much higher prices than its competitors - CORRECT ANSWERS โโD "Intentional manipulation of financial statements" describes what kind of fraud? a. management b. criminal c. stock market d. bookkeeping - CORRECT ANSWERS โโA Which of the following is required to become a CFE? a. an individual must commit to abide by a strict code of professional conduct & ethics b. be an associate member, in good standing, of the ACFE c. be of high moral character d. all of the above - CORRECT ANSWERS โโD Which of the following is NOT true regarding the ACFE? a. it is the largest anti-fraud organization in the world b. it has roughly 12,000 members throughout the world c. the entire organization is dedicated to anti-fraud-fighting efforts d. it is the premier provider of anti-fraud training - CORRECT ANSWERS โโB
Fraud perpetrators: a. look like other criminals b. have profiles that look like most honest people c. are usually very young d. are none of the above - CORRECT ANSWERS โโB Which of the following is NOT one of the 3 elements of the fraud triangle? a. perceived pressure b. perceived opportunity c. rationalization d. intelligence - CORRECT ANSWERS โโD Which of the following is a common perceived pressure? a. the ability to outsmart others b. opportunity to cheat others c. a financial need d. the ability to "borrow" money by committing fraud - CORRECT ANSWERS โโC If pressures & opportunities are high and personal integrity is low, the chance of fraud is: a. high b. medium
which of the following non-control factors provides opportunities for fraud? a. inability to judge the quality of performance b. lack of access to, or asymmetrical, information c. failure to discipline fraud perpetrators d. lack of an audit trail e. all of the above - CORRECT ANSWERS โโE who generally has the highest risk of becoming a fraud victim? a. businessperson b. older, less educated people c. college students d. none of the abovw - CORRECT ANSWERS โโB How frequently to most people rationalize? a. often b. sometimes c. rarely d. never - CORRECT ANSWERS โโA which of the following kinds of pressure is most often associated with fraud? a. work-related pressures b. financial pressures c. vice pressures
d. none of the above - CORRECT ANSWERS โโB which of the following is NOT a primary control activity? a. use of documents & records to create an audit trial b. independent checks c. decreasing work-related pressure d. physical safeguards - CORRECT ANSWERS โโC it is the ______ and ______ of existing controls, not the ______ of controls, that allows most frauds to be perpetrated a. existence, use, lack b. lack, ignoring, existence c. overriding, ignoring, lack d. overriding, lack, use - CORRECT ANSWERS โโC on what element of the fraud triangle do most fraud-fighting usually focus all or most of their fraud preventive efforts? a. perceived pressure b. perceived opportunity c. power structure d. rationalization - CORRECT ANSWERS โโB which of the following is NOT an internal control activity (procedure)? a. system of authorizations
a. taking the assets b. concealment c. breaking & entering d. conversion - CORRECT ANSWERS โโC which of the following is an example of legitimate power? a. the offer of valuable stock options b. a decision to participate in fraud based upon fear c. your boss tells you to do something d. you do something because of colleague is more knowledgeable that you are in that particular subject matter - CORRECT ANSWERS โโC which of the following is an example of referent power? a. fear that you may lose your job b. your friend asks you to do a special favor for him or her c. the offer of a job promotion d. your teacher asks you to do an assignment - CORRECT ANSWERS โโB the most effective way to reduce losses from fraud is: a. detecting fraud early b. implementing proactive fraud detection programs c. preventing fraud from occurring d. severely punishing fraud perpetrators - CORRECT ANSWERS โโC
One way that criminal law differs from civil law is that is: a. provides remedies for violations of private rights b. must yield an unanimous verdict c. can have a jury of fewer than 12 persons d. allows for various claims in one action - CORRECT ANSWERS โโB Which of the following is NOT an element of a Ponzi scheme? a. gaining other's confidence b. promising abnormally high returns c. collected money is invested d. investment principle is partially used to make payments to previous investors - CORRECT ANSWERS โโC The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT: a. not reporting bribe income may be grounds for being charged with tax evasion. b.filing income tax that excludes income from fraud may be considered an improper tax filing. c. bribes paid may be deducted as business expenses. d. failure to report income from fraud may be grounds for being charged with taxevasion. - CORRECT ANSWERS โโC which one of the following is NOT a characteristic of a criminal proceeding?
which of the following is NOT a proactive way for a company to eliminate fraud opportunities? a. severely punishing fraud perpetrators b. assessing risks c. implementing appropriate preventive & detective controls d. creating widespread monitoring of employees - CORRECT ANSWERS โโA most frauds start small and: a. if not detected, continue to get larger b. usually decrease in amount c. remain steady & consistent d. none of the above - CORRECT ANSWERS โโA because of the ability to override internal controls, it is usually most difficult to prevent which type of fraud... a. investment scams b. fraud committed by a company president c. employee fraud d. customer fraud - CORRECT ANSWERS โโB which of the following refers to the circumstances, taken as a whole, that would lead to a reasonable prudent professional to believe fraud has occurred, is occurring, or will occur? a. evidential circumstance
b. investigation c. invigilation d. prediction - CORRECT ANSWERS โโD a method of classifying investigative approaches into testimonial evidence, documentary evidence, physical evidence, & personal observations is referred to as the: a. investigate square of evidence b. investigation square c. evidence square d. fraud triangle plus - CORRECT ANSWERS โโC usually, for everyone involved--especially victims--the investigation of fraud is very: a. pleasant & relaxing b. educational c. exciting d. traumatic & difficult - CORRECT ANSWERS โโD to prevent fraud from reoccurring, most organizations & other fraud victims should: a. take no legal action b. pursue only civil remedies c. pursue only criminal remedies
opportunities to commit fraud can be eliminated by identifying sources of fraud, by implementing controls, & through independent checks. one other effective way of eliminating opportunities is: a. teaching employees to monitor & report fraud b. terminating & punishing employees who commit fraud c. failing to terminate or punish employees who commit fraud d. identifying indicators of fraud or red flags - CORRECT ANSWERS โโA drawbacks to establishing a hotline for employees to report fraud include all of the following except: a. the expense of having a hotline b. many incidents reported are hoaxes motivated by grudges or other non- fraud reasons c. some symptoms reported are caused by non-fraud factors d. this method for finding fraud is outdated - CORRECT ANSWERS โโD "Prediction of fraud" is defined as: a. reasonable belief that fraud has occurred or is occurring b. irrefutable evidence that fraud has been committed c. motivation for committing fraud d. punishment of fraud perpetrators - CORRECT ANSWERS โโA which of the 4 types of evidence includes interrogation & honesty testing? a. testimonal
b. documentary c. physical d. personal observation - CORRECT ANSWERS โโA the 3 elements present in most cases of fraud are: a. theft act, rationalization, & opportunity b. pressure, opportunity, & conversion c. theft act, concealment, & conversion d. theft act, pressure, & opportunity - CORRECT ANSWERS โโC most often, victims of fraud do not take legal action against perpetrators. this is because legal action can be: a. unproductive b. embarrassing c. expensive d. all of the above - CORRECT ANSWERS โโD the best argument for taking legal action against fraud perpetrators is: huge cash settlements from prosecuting fraud are an excellent source of revenue b. legal action usually results in positive publicity for the company c. prosecution of perpetrators is a way to keep lawyers busy d. prosecution of perpetrators discourages future occurences of fraud - CORRECT ANSWERS โโD
