ACC 5375- Forensic Accounting-FINAL

Which legal code makes the bribing of public officials illegal?

Title 18, US Code Section 201

Which of the following statements about criminal and civil cases is correct?

The purpose of a criminal case is to right a wrong , the purpose of civil case if to obtain a remedy

Which of the following skills would be LEAST beneficial in a career as a fraud fighting professional?

Mechanical Skills

Fraud stats comes from all of the following sources EXCEPT

Fraud perpetrators

Who are the primary victims of financial statement fraud?

Stockholders

Fraud in companies such as world com, eron , and parmalat are examples of

Management Fraud

One way that criminal law differs from civil law is that it:

Must yeild a unanimous verdict

Which individual listed is most likely to commit finanacial statement fraud in order to benefit an organization?

An executive

Civil claims begin when one party files a complain against another, usually for the purpose of

Being awarded financial restitution

Which of the following frauds is usually the most expensive?

Management (Financial Statement) Fraud

Which of the following is NOT an example of a fraud fighting career?

Serving as an expert witness

Which of the following is NOT an element of a Ponzi Scheme?

Maintaining the security of public records

Which of the following is a result of the presense of fraud prevention controls within an organization?

Employees are less likely to commit fraud

Which of the following is true about legal action taken by orgizations that are the victims of fraud?

Legal action is taken in fewer than half of the fraud committed

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

Password protection

A person may have very strong ethics in the way they treat family and friends, but not understand how failure to submit to unethical or fraudulent behavior. This is an ethical issue in which level of the ethical maturity model?

Application of ethics to bussiness situations

Which of the following observations is true ?

Most fraud perpetrators have profiles that are similar to those of other people.

In the ethical maturity model, instilling in others desire to develop ethical awareness an courage is referred to as:

Ethical leadership

Which of the following is NOT a possible control activity?

Supervisory review of each task completed by employees

An orginazation that requires that employee in its accounting department take mandatory vactions once a year. Which control activity is the company using?

Independent checks

Which of the following indicates proactive frauds auditing?

Creating an awareness amoung employees that their actions can be reviewed at any time

How does a smart embezzler manipulate accounting records to conceal fraud?

By increasing Expenses

Which of the following is true statement in regards to the actions of a person who has commited fraud?

A fraud perpetrator may start entertaining co workers more often and more lavishly

Which of the following acts by management could discourage someone frome reporting an observed act of fraud?

Providing a clear list or possible consequences

Which of the following is a highly suspicious financial statement relationship?

Increased inventory with decreased payables

Indentify the formula used to calculate z score

(Value - Mean) / Standard Deviation

The proactive method of fraud dection is a 6 step process. Which of the following is the correct process sequence?

1- Understand the business
2- Identify possible frauds that could exist
3- Catalog possible fraud symptoms
4- Use technology to gather data about symptoms
5- Analyze results
6- Investigate symptoms

Specific implementations of delimited text are called TSV. What does TSV stand for?

Tab seperated values

Which of the following is least effective while searching for anomalies?

Comparing account balances in the statements from one period to the next

What is the primary drawbacks of the data driven approach?

More expensive and time intensive than the traditional approach

Most software packages have functions for generating _____ about columns of data, which include statistical summaries like control totals, mean, maximum, minimum, standard deviation, number of zero values, number of empty records, and so on.

Descriptives

One of the most common errors investigators make when analyzing time trend is:

Not standardizing time

According to Benford's law, 5 will be the first digit of a random number set:

Less often then 4

Telemarketing fraud usually falls in this category

Investment scams

The burder of proof in a criminal case

Is beyond a resonable doubt

Which of the following is a common example of vendor fraud

Fraud perpetrated through collusion between buyers and vendors

To be successful, plaintiffs in civil cases must prove their cases by which of the following?

By the preponderance of the evidence

Which of the following is the most common type of occupational fraud?

Employee Embezzlement

Which of the following is NOT a characteristic of a crimninal Proceeding?

Consequenses include restitution and damage payments

The ACFE does NOT include which of the following major categories of occupational fraud?

Pension fraud

The word "Con" Whihc means to deceive, comes from the word :

Confidence

Which level in the ethical maturity model can be summarized as a "willingness to pay the price for ethics"?

Ethical Courage

Individuals often partcipate in fraud because they believe that by not participating in the fraud scheme, they may lose:

Coercive power

In recent years, organizations have implemented a number of initiatives to more proactively detect fraud. The first and most common proactive fraud detection approach has been to:

Install reporting hotlines

Which of the following is NOT a proactive hiring procedure?

Instilling in employees a desire to develop ethical awareness and courage to do the right thing

Which of the following is NOT a part of the evidence square?

Management evidence

Which of the following is NOT a true statement?

Perceived opportunity diminishes when fraud prepetrators are prosecuted

Which of the following is NOT one of the key elements common to all frauds?

Perceived inequality

Which type of evidence is gathered from individuals using investigative techniques such as interviewing and interrogation?

Testimonial Evidence

An employee who has the resonsibility of both writing checks and making bank deposits would have ___ to commit fraud

A percieved opportunity

Most fraud perpeturators have profiles that looks like:

Those of honest people

What is the most important element in a control environment?

Managment's role and example

Which of the following is FALSE concerning legal actions by organizations regarding fraud?

Legal action stops future frauds

In an orgnization, individuasls who suspect fraud usually dont come forward because they:

Fear beinf branded a whistle blower

Implementing a system of independent checks is one of the most effective ways to deter fraud. Which one of the following is NOT a way of providing independent checks on employees?

Authorization required for purchases of over $2,000.00 or more

Which of the following is FALSE regarding a comprehensive approach of fighting fraud?

Detecting fraud is the responsilibity of the independent auditors

Which of the following observations concerning collusive frauds is TRUE?

They are usually slower to develop then fruds committed by one individual.

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

Present lifestyle

Which of the following is NOT an analytical fraud symptom?

Overriding of existing

Preventing controls includes:

Segregation of duties

Which of the following actions would most likely create a opportunity for fraud?

Requiring one password code for each entire department to enter the store room

Which of the following is a true statement in regards to tell tell signs of fraud in employees?

Lifestyle changes are often the easiest fraud symptoms to detect

Which of the following is the fondation fo rall other componets of internal control, providing discipline and structure?

Control Enviroment

Approximately ___ of all frauds are commited by an individual acting alone. The remaining___ involve collusion and often involve the ___ thefts

71% , 29%, Largest

Which term refers to people who commit a fraud or other crime and do not feel guilt or stress?

Psycopaths

The correst order of the 6 elements of the fraud fighting moedl is:

1- Tone at the top
2- Education and training
3- Integrity risk and controls
4- Reporting and monitoring
5- Proactive detection
6- Investigation and follow up

Research in psychology indicated that when people commit a crime, they are initially overwhelmed by ___ and ___

Guilt and Fear

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

Having a clearly defined code of conduct in place

A red flag search to detect kickbacks would include:

Price increases greater than 20% for several consecutive years

While using n-grams, a match percentage of ________ or ________ generally indicates very similar values.

20% or Greater

Horizontal Analysis is performed when:

financial statement data are shown for two periods with the amount and percentage of change for each line item.

Which of the following record data for each case in a graph and analyzes the slope?

Time trend analysis

Kickbacks from vendors to buyers might generate which one of the following symptoms?

Buyer not relating well to other buyers and vendors

Which of the following financial statements can be used to answer the question, "where did the cash come from to pay dididends?"

Statement of cash flows

Which of the following statements regarding ODBC is NOT accurate?

ODBC stands for Open Datebase Communications

Bendford's Law

Applies best to numbers that occur naturally

One of the disadvantages of Bendford's Law in detecting fraud is:

It only broadly identifies the possible existense of fraud, it fails to narrow possibilities to a manageable field of promising leads

Which of the following ratios can be used to assess a company's Sovency?

Current Ratio

What is the primary advantage of the data driven approach?

The investigator takes charge of the fraud investigation process

Which of the following is true of most accounting errors?

They are problems caused by failure in systems, procedure and policies

Surveillance is usually used to investigate

Theft acts.

Which of the following is a basic objective of surveillance, whether manual or electronic

Catch fraud at the theft act stage

An investigatior locates the scence that should observed, anticipated the action that is most likely to occur at the scenece, and keeps detailed notes on all activities involving the suspect. Which type of surveillance is being used here?

Stationary Surveillance

What is used in court cases to prove that data has not been adversely affected during analysis?

Checksums

Which of the following statements regarding invigilation is accurate?

It is most commonly used in such high risk areas such as expensive inventory

Which of the following is a benefit of creating a vulnerability chart?

It forces the investigators to explicitly consider all aspects of a fraud act

A divisional manager is suspected of adding ghost employees to the payroll. Which investigative method can most easily uncover this type of fraud?

Concealment

Web based e mail within a user's browser

Is especially easy to search requiring no search warrant.

Which investigation technique usually does not work well in kickback situations?

Concealment

Electronic surveillance may have only limitied value in the investigation of employee frauds and many other white collar crimes. Why?

Concerns regarding employees' privacy

Identify the best pattern/order to go about a theft investigation.

Check personnel record, interview former emploers, search public records, interview other buyers, and interview other buyers and interview suspects.

__ means that there are symptoms or red flags that a fraud may be occuring.

Predication

Which general term refers to the gathering of electronic evidence?

Computer forensics

Undercover operations should be used only when:

large scale fraud is likely and other investigation methods fail.

The two primary checksum methos used today are:

MDS and SHA-1

Concealment investigative techniques do not work well in kickback situations. Why?

There is usually no direct documentary evidence

Identify the first step in any electronic evidence collection process.

Seizure of the device

Which of the following are theft act investigation methods that usually involves observing or listening to potential perpetrators?

Surveillance and covert operations

Which investigation technique relies on a person's senses, especially hearing and seeing?

Surveillance and covert operations.

Which checksum methos is considered more advanced and secure than the method it replaced?

SHA-1