CFE Exam Section 1 - Financial Transactions and Fraud Schemes Test #1

Cash theft schemes fall into which of the following two categories?

A. Skimming and cash larceny

B. Unrecorded sales and false discounts

C. Skimming and unrecorded sales

D. Register manipulation and understated sales

A. Skimming and cash larceny

Which of the following types of transactions is LEAST likely to use a person-to-person (P2P) payment system?

A. A person transferring money to a friend abroad

B. A person buying groceries at a supermarket

C. A person making an online donation to a charity

D. A person paying for an item on an online auction site

B. A person buying groceries at a supermarket - this is typically an in person transaction

In a _________, a bank buys, sells, and swaps its bad loans for the bad loans of another bank, creating new documentation in the process.

A. Linked financing arrangement

B. Daisy chain

C. Reciprocal loan arrangement

D. False swap scheme

B. Daisy chain

A virus that loads itself onto the target system's memory, infects other files, and then unloads itself is called a:

A. Network virus

B. Direct-action virus

C. Boot sector virus

D. None of the above

B. Direct-action virus

Which of the following is a method by which contractors can inflate labor costs in negotiated contracts?

Subcontract to affiliated companies at inflated rates.

Defective pricingarises when

contractors intentionally use inaccurate cost or pricing data to inflate costs in negotiated contracts (i.e., the contracting method that permits negotiations between the procuring entity and prospective contractors). A contractor can use various defective pricing schemes to increase the cost of the contract and thereby its profits, but generally, defective pricing schemes involve inflated labor costs or inflated material costs

Which of the following health care frauds would be best described as a fictitious provider scheme?

A thief steals a health care provider's identifier and bills a government health care program under the name of a fake clinic

___________targets groups of individuals who have some social connection. Neighborhoods chiefly populated by racial minorities, especially immigrant groups, are often the site of affinity frauds, and the elderly and language minorities are frequent targets as well. In addition, religious and professional ties are often exploited.

affinity fraud

All of the following are types of expense reimbursement schemes EXCEPT:

Ghost expense reports

Which of the following situations is often present in real estate fraud schemes?

false appraisal forms

Generally speaking, under U.S. GAAP, _________________ is the proper basis for recording a piece of equipment on a company's books

A. Current market value

B. Estimated replacement value

C. Historical cost

D. Appraised value

historical cost

Vertical analysis can best be described as a technique for analyzing a percentage change from one accounting period to the next.

true or false?

false

A skimming scheme is easier to detect than a cash larcenyscheme because it leaves an audit trail. true or false

false

compliance with generally accepted accounting principles (GAAP) would be significantly more expensive than a different method that isn't GAAP, use of an alternative method is permitted.

false

Which of the following are information security goals that an e-commerce system should endeavor to meet for its users and asset holders?

I. Penetrability of data

II. Materiality of data

III. Integrity of data

IV. Availability of data

B. III and IV only

What happens when an employee records a fictitious refund of goods at the employee's cash register?

A. The victim company's inventory is overstated

B. Inventory is returned to the store

C. The register total is out of balance with the register log

D. None of the above

A. The victim company's inventory is overstated

All of the following measures are recommended to help mitigate the risk of billing schemes EXCEPT:

A. Implement a hotline function.

B. Prohibit competitive bidding.

C. Separate the purchasing function from the payment function.

D. Provide objective compensation for purchasing staff.

prohibit competitive bidding

Which of the following situations would be MOST indicative of a customer committing new account fraud at a bank?

A. A customer opens a new personal account and immediately requests two ATM cards.

B. A customer opens a business account and soon after has payroll transactions on the account.

C. An invalid address or phone number is listed in the customer's account information.

D. A customer deposits a substantial amount of funds in a new personal account and does not spend or withdraw them for several months.

c An invalid address or phone number is listed in the customer's account information

Which of the following is NOT a common red flag of procurement fraud schemes involving collusion among contractors?

A. There is limited competition within the industry.

B. Bid prices begin to fall when a new competitor enters the competition.

C. The same contractors bid on each project or product.

D. More competitors than usual submit bids on a project or product.

D. More competitors than usual submit bids on a project or product.

Jason, a server at a popular restaurant, takes a customer's credit card to process a payment. While he is on the other side of the dining area with his back turned, Jason swipes the card through a small device that he regularly uses to steal his customers' credit card information. Jason is engaging in a scheme known as credit card ________

.A. Scanning

B. Skimming

C. Pinching

D. Probing

b. skimming

Workers' compensation schemes are generally broken into four categories. Which of the following is NOT one of these categories?

A. Agent fraud

B. Premium fraud

C. Double duty fraud

D. Claimant fraud

c. double duty fraud

Which of the following is NOT one of the key phases of procurement processes that employ competitive bidding mechanisms?

A. The post-award and administration phase

B. The solicitation phase

C. The purchase and procurement phase

D. The presolicitation phase

C. The purchase and procurement phase

Which of the following statements is TRUE with regard to the statement of cash flows?

A. The statement of cash flows is often used in tandem with the income statement to determine a company's true financial performance.

B. There are four types of cash flows: cash flows from operating activities, from investing activities, from financing activities, and from revenue activities.

C. The statement of cash flows is not always necessary because most companies operate under cash-basis accounting rather than accrual accounting.

D. The statement of cash flows shows a company's financial position at a specific point in time.

A. The statement of cash flows is often used in tandem with the income statement to determine a company's true financial performance.

Password cracking is a method that attackers use to gain unauthorized access to a computer system by bypassing password security through the use of undocumented system functions. true or false

false

The assumption that a business will continue indefinitely is reflected in the accounting concept of:

A. Objective evidence

B. Going concern

C. Materiality

D. Cost

going concern

Which of the following is a means of measuring the relationship between two different financial statement amounts?

A. Statement comparison

B. Ratio analysis

C. Relational comparison

D. Transaction detail analysis

b. ratio analysis

Which of the following is the most accurate definition of spyware?

A. A type of software that collects and reports information about a computer user without the user's knowledge or consent

B. A program or command procedure that gives the appearance that it is useful but in fact contains hidden malicious code that causes damage

C. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems

D. Any software application in which advertising banners are displayed while a program is running

A. A type of software that collects and reports information about a computer user without the user's knowledge or consent

A confidence scheme designed to part victims from their money by falsely promising the future delivery of a product or service in exchange for an upfront payment is called a(n):

A. Home-based business scheme

B. Advance-fee swindle

C. Scavenger scheme

D. Bait and switch

B. Advance-fee swindle

Which of the following is the correct calculation of the quick ratio?

A. (Cash + marketable securities) / accounts payable

B. (Cash + marketable securities + receivables) / current liabilities

C. (Cash + receivables) / current liabilities

D. Current assets / current liabilities

B. (Cash + marketable securities + receivables) / current liabilities

___________ involve paying individuals to undergo unnecessary medical procedures that are then billed to the patient's insurer or health care program.

A. False cost reporting schemes

B. Fictitious patient schemes

C. DRG creep schemes

D. Rent-a-patient schemes

D. Rent-a-patient schemes

Which of the following best describes how a baiting scheme works in the context of identity theft?

A. Fraudsters use imitation websites to trick computer users into entering sensitive data.

B. Fraudsters trick victims into inserting malware-infected data storage devices into their computers.

C. Fraudsters impersonate the victim's bank to persuade the victim into releasing information.

D. Fraudsters use telephone calls or voice messages to manipulate targets into revealing personal or business information.

B. Fraudsters trick victims into inserting malware-infected data storage devices into their computers.

_______________ is a system by which the bank verifies checks presented for payment against the list provided by the company of approved checks written on the account.

A. Verification control

B. Payment patrol

C. Check matching

D. Positive pay

D. Positive pay

The debt-to-equity ratio is computed by dividing current liabilities by total equity.

A. True

B. False

False

Which of the following is most indicative that the winning bid on an original construction project was not feasible?

A. Missing documentation

B. Increasing trend in the number of change orders

C. Draw requests

D. High turnover in developer's personnel

B. Increasing trend in the number of change orders

Non-repudiation refers to a method used to guarantee that parties involved in an e-commerce transaction cannot deny their participation in it.

A. True

B. False

T

Matthew receives a voice mail message telling him that his credit card might have been used fraudulently. He is asked to call a phone number. When he calls the number, he hears a menu and a list of choices that closely resembles those used by his credit card company. The phone number even appears to be similar to that of his card issuer. Of which of the following types of schemes has Matthew become the target?

A. SMiShing or tishing

B. Pharming

C. Vishing

D. Spear phishing

C. Vishing

_________________ is the most common type of identity theft.

A. Business identity theft

B. Financial identity theft

C. Criminal identity theft

D. Medical identity theft

B. Financial identity theft

Which of the following activities is included in the post-award and administration phase of procurements involving open and free competition?

A. The procuring entity develops the bid specifications.

B. The procuring entity issues the solicitation document.

C. The procuring entity performs its contractual obligations.

D. The procuring entity evaluates the bids or proposals.

C. The procuring entity performs its contractual obligations.

Which of the following is an information security goal that an e-commerce system should endeavor to meet for its users and asset holders?

A. Access authority

B. Systems reliability

C. Exactness

D. Non-repudiation

D. Non-repudiation

The most common giveaway scheme, in which a postcard arrives in the mail telling the recipient he has already won a prize such as a luxurious vacation or cash, is known as:

A. The "1-in-5"

B. The "Fly and Buy"

C. The "Bait and Switch"

D. None of the above

A. The "1-in-5"

Ed Smith, a city commissioner, negotiated a land development deal with a group of private investors. After the deal was approved, the investors rewarded Smith with an all-expenses-paid trip, even though giving such rewards to government officials is prohibited by law. Which of the following is the most appropriate term to describe what has taken place?

A. Collusion

B. Illegal gratuity

C. Need recognition

D. Economic extortion

B. Illegal gratuity

Michael, a medical provider, performs an appendectomy, a procedure that is supposed to be billed as one code. Instead, he intentionally submits two codes for the same procedure, one for an abdominal incision and one for removal of the appendix. Which of the following best describes Michael's scheme?

A. Decompressing

B. Procedure compounding

C. Unbundling

D. Fictitious services

C. Unbundling

At the end of each fiscal year, the accounts reflected on the income statement are reduced to a zero balance.

A. True

B. False

True

Implementing privilege escalation and using buffer overflow exploits are examples of administrative controls used for securing computer systems and communication networks.

A. True

B. False

false

Which of the following statements is TRUE with regard to a fictitious revenue scheme?

A. The debit side of a fictitious sales entry usually goes to accounts payable.

B. Fictitious revenues must involve sales to a fake customer.

C. If a fictitious revenue scheme has taken place, there will typically be no accounts receivable on the books.

D. Uncollected accounts receivable are a red flag of fictitious revenue schemes

D. Uncollected accounts receivable are a red flag of fictitious revenue schemes

The asset turnover ratio is used to assess a company's ability to meet sudden cash requirements.

A. True

B. False

false

The asset turnover ratio measures the efficiency of a company's assets to generate revenue or sales.

Why is the health care industry concerned about the potential effect of the Electronic Data Interchange (EDI) on fraudulent activity?

A. The efficiency of EDI allows for more vendors and thus more claims to process

B. The tools required to detect EDI fraud are difficult to use

C. Only a few types of health care transactions can be processed by EDI

D. All of the above

A. The efficiency of EDI allows for more vendors and thus more claims to process

The statement of cash flows includes the following categories: cash flows from strategic activities, cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

A. True

B. False

False

Which of the following is the best definition of the automobile insurance scheme known as ditching?

A. An insured falsely reports a vehicle as stolen to collect on an insurance policy.

B. An insured has two insurance policies in place and files claims with both.

C. An agent collects a customer's premium, but he does not remit the payment to the insurance company.

D. An agent inflates his commissions by pressuring customers to unnecessarily replace existing policies for new ones

A. An insured falsely reports a vehicle as stolen to collect on an insurance policy.

Which of the following is the most accurate definition of a Trojan horse?

A. A program or command procedure that gives the appearance that it is useful but in fact contains hidden malicious code that causes damage

B. A type of software that collects and reports information about a computer user without the user's knowledge or consent

C. A virus that changes its structure to avoid detection

D. A software program that contains various instructions that are carried out every time a computer is turned on

A. A program or command procedure that gives the appearance that it is useful but in fact contains hidden malicious code that causes damage

Heidi, a Certified Fraud Examiner and internal auditor for a health care program, has been asked to review the program's system of internal controls in the claims processing area. Heidi has decided to present the management of the unit with a list of general indicators for fraud that are applicable to many health insurance fraud schemes by program beneficiaries. All of the following would be included on Heidi's list EXCEPT:

A. Individuals who mail their claim and ask for their claim payment to be sent through direct bank transfer

B. Threats of legal action when a claim is not paid quickly

C. Anonymous telephone or email inquiries regarding the status of a pending claim

D. Pressure by a claimant to pay a claim quickly

A. Individuals who mail their claim and ask for their claim payment to be sent through direct bank transfer

Which of the following is NOT a method that a fraudster might use to conceal inventory shrinkage?

A. Physical padding of inventory

B. Falsely increasing the perpetual inventory figure

C. Altering the perpetual inventory records to decrease the balance

D. Writing off stolen inventory as scrap

B. Falsely increasing the perpetual inventory figure

The most effective way to prevent and detect electronic payment fraud is through proper separation of duties.

A. True

B. False

True

How does positive pay help prevent check fraud?

A. Positive pay controls which vendors the company's bank can deposit checks from.

B. The bank scans all checks presented for payment to determine whether the signatures are forged.

C. The bank verifies checks presented for payment against a list of approved checks provided by the company.

D. Positive pay establishes a maximum amount above which the company's bank will not accept checks drawn against the account.

C. The bank verifies checks presented for payment against a list of approved checks provided by the company.

Which of the following is the term used to describe the method of gaining unauthorized access to a computer system in which attackers use an automated process to guess a system user's passwords?

A. Password cracking

B. Password sniffing

C. Password engineering

D. Password logging

A. Password cracking

The emerging environment of everyday objects that use embedded sensors to collect and transmit data through the Internet is best known as:

A. The Internet of Things

B. The Emerging Technology Domain

C. The Deep Web

D. The Smart Technology Network

A. The Internet of Things

Implementing privilege escalation and using buffer overflow exploits are examples of administrative controls used for securing computer systems and communication networks.

A. True

B. False

false

A forged maker scheme is a check tampering scheme in which an employee intercepts a company check intended for a third party and converts the check by signing the third party's name on the check's endorsement line.

A. True

B. False

False

DRG creep occurs when staff members at medical institutions intentionally manipulate diagnostic and procedural codes in a pattern to increase claim reimbursement amounts.

A. True

B. False

A. True

In a take-the-money-and-run scheme, fraudsters lure potential victims using fake vacation rental listings or websites advertising properties that do not actually exist.

A. True

B. False

A. True

Karl finds a residential property with a non-resident owner. He then forges contractual property documents showing that the owner is transferring ownership of the property completely to Karl, such as would normally happen during a property sale. The property owner is unaware that Karl has created and filed the documents. Later, Karl takes the falsified documents to a lender and borrows money against the property. Which of the following best describes Karl's scheme?

A. Unauthorized draw on home equity line of credit

B. Air loan

C. Fraudulent sale

D. Property flipping

C. Fraudulent sale

Sales and cost of goods sold almost always move together, unless there have been changes in purchase prices, quantities purchased, or quality of products being purchased.

True or false?

True

For the purpose of fraud detection, procurement processes that employ competitive bidding mechanisms can be reduced to four basic stages:

The presolicitation phase

•The solicitation phase

•The bid evaluation and award phase

•The post-award and administration phase

Publicly available information that anyone can lawfully obtain by request, purchase, or observation is known as which of the following?

A. Open-source information

B. Free-source information

C. Confidential-source information

D. Wide-source information

open source info

A medical provider billed an insurance company for a name-brand drug, while providing the patient with a generic version of the drug. This inflated billing scheme is known as which of the following?

A. Unbundling

B. Upcoding

C. Undercharging

D. Replacement fraud

b. upcoding

Pass-through schemes are usually undertaken by employees who receive inventory on the victim company's behalf. true or false?

false - Instead of buying merchandise directly from a vendor, the employee sets up a shell company and purchases the merchandise through that fictitious entity. He then resells the merchandise to his employer from the shell company at an inflated price, thereby making an unauthorized profit on the transaction.

The statement of changes in owners' equity acts as the connecting link between which two financial statements?

A. Balance sheet and statement of retained earnings

B. Income statement and balance sheet

C. Income statement and statement of cash flows

D. Statement of cash flows and balance sheet

IS and balance sheet

Which of the following statements is TRUE with regard to factoring companies?

A. Factoring is illegal in all jurisdictions.

B. Factoring companies approach banks on a telemarketer's behalf in order to secure credit card processing services.

C. Factoring companies in Asian and European countries tend to charge more for their services than factoring companies in other countries.

D. Factoring groups buy credit card receipts from telemarketing operations at a discount.

D. Factoring groups buy credit card receipts from telemarketing operations at a discount.

Excessive write-offs are a form of concealment for which of the following schemes?

A. Conflicts of interest

B. Embezzlement

C. Phantom loans

D. All of the above

d.all of the above

Which of the following best describes social engineering?

A. A method for gaining unauthorized access to a computer system in which an attacker searches through large quantities of available data to find sensitive information that he can use to facilitate his intended scheme

B. A method for gaining unauthorized access to a computer system in which an attacker hides near the target to obtain sensitive information that he can use to facilitate his intended scheme

C. A method for gaining unauthorized access to a computer system in which an attacker bypasses a system's security through the use of an undocumented operating system and network functions

D. A method for gaining unauthorized access to a computer system in which an attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attacker's intended scheme

D. A method for gaining unauthorized access to a computer system in which an attacker deceives victims into disclosing personal information or convinces them to commit acts that facilitate the attacker's intended scheme

In a take-the-money-and-run scheme, fraudsters lure potential victims using fake vacation rental listings or websites advertising properties that do not actually exist.

A. True

B. False

true

All of the following are types of expense reimbursement schemes EXCEPT:

A. Mischaracterized expenses

B. Fictitious expenses

C. Ghost expense reports

D. Multiple reimbursements

C. Ghost expense reports

Which of the following situations can constitute health care fraud committed by an insurance company?

A. Failing to follow procedures to detect fraudulent claims when acting as an intermediary for another insurance program

B. Failing to pay a claim because the claim is missing required information

C. Submitting cost data to health care regulators to justify rate increases

D. All of the above

A. Failing to follow procedures to detect fraudulent claims when acting as an intermediary for another insurance program

All of the following are payroll scheme types EXCEPT:

A. Ghost employees

B. Falsified hours and salary

C. Commission schemes

D. Stolen paychecks

D. Stolen paychecks - If an employee stole paychecks, this would fall under check tampering, not payroll fraud.

All of the following are measures that would be helpful in preventing cash larceny schemes EXCEPT:

A. Ensuring that the duties of making bank deposits and performing bank reconciliations are assigned to different individuals

B. Having all employees use the same cash register for their transactions

C. Sending out a company-wide communication informing employees of the company's surprise cash count policy

D. Assigning an employee's duties to another individual when that employee goes on vacation

B. Having all employees use the same cash register for their transactions

One method competitive intelligence professionals commonly use to gather data about a competitor involves posing as a job applicant and interviewing with key employees at the competing company. This practice is best described as conducting surveillance.

A. True

B. False

false - intelligence?

All of the following are types of medical provider fraud EXCEPT:

A. Fictitious services

B. Rolling labs

C. Fictitious providers

D. Smurfing

d. smurfing - Smurfing is a scheme to launder funds through financial institutions.

Which of the following lists the information security goals that an e-commerce system should achieve for its users and asset holders?

A. Penetrability, accuracy, availability, authentication, and systems reliability

B. Penetrability, accuracy, exactness, materiality, and systems reliability

C. Confidentiality, integrity, availability, authentication, and non-repudiation

D. Exactness, invulnerability, accuracy, materiality, and data/systems response

C. Confidentiality, integrity, availability, authentication, and non-repudiation

Matthew receives a voice mail message telling him that his credit card might have been used fraudulently. He is asked to call a phone number. When he calls the number, he hears a menu and a list of choices that closely resembles those used by his credit card company. The phone number even appears to be similar to that of his card issuer. Of which of the following types of schemes has Matthew become the target?

A. Pharming

B. Spear phishing

C. SMiShing or tishing

D. Vishing

D. Vishing

Physical access controls refer to the process by which users are allowed access to computer programs, systems, and networks.

A. True

B. False

False - Physical access controls refer to the process by which users are allowed access to physical objects (e.g., buildings). In contrast, logical access controls are tools used to control access to computer information systems and their components.

Falsified prescriptions for equipment, excessive supplies, noncovered supplies, and scooter scams are forms of fraud commonly involving what type of health care entity?

A. Hospitals

B. Out-patient services groups

C. Reusable medical equipment suppliers

D. Special care facilities

C. Reusable medical equipment suppliers

Both falsely increasing the perpetual inventory balance and failing to reconcile inventory records are ways a fraudster might conceal inventory shrinkage.

A. True

B. False

B. False - Falsely increasing the perpetual inventory record would only worsen the shrinkage problem. Instead, a fraudster seeking to conceal shrinkage would falsely decrease the perpetual inventory record to match the lower physical inventory count. In addition, failing to reconcile inventory records would likely cause more suspicion to arise.

The method of concealing a receivables skimming scheme whereby one customer account is credited for a payment that was made on another account is called which of the following?

A. Currency substitution

B. Altered payee designation

C. Inventory padding

D. Lapping

D. Lapping

Which of the following best describes the difference between a flipping scheme and a flopping scheme in the context of mortgage fraud?

A. In a flopping scheme, the lender is not one of the potential victims of the scheme.

B. In a flopping scheme, the original seller always ends up as the final owner of the property.

C. In a flopping scheme, the value of the first transaction is deflated instead of inflating the second transaction.

D. In a flopping scheme, the second transaction in the scheme usually occurs several years after the first.

C. In a flopping scheme, the value of the first transaction is deflated instead of inflating the second transaction.

Jason, a server at a popular restaurant, takes a customer's credit card to process a payment. While he is on the other side of the dining area with his back turned, Jason swipes the card through a small device that he regularly uses to steal his customers' credit card information. Jason is engaging in a scheme known as credit card ________.

A. Probing

B. Skimming

C. Scanning

D. Pinching

B. Skimming

_________ is an attack in which a user is fooled into entering sensitive data into a malicious website that imitates a legitimate website.

A. Phishing

B. Pharming

C. SMiShing

D. Spear phishing

B. Pharming

Victims of consumer fraud are more likely to be organizations or businesses rather than individuals. true or false?

true

For the purpose of fraud detection, procurement processes that employ competitive bidding mechanisms can be reduced to four basic stages:

The presolicitation phase

The solicitation phase

The bid evaluation and award phase

The post-award and administration phase

Which of the following is NOT one of the key phases of procurement processes that employ competitive bidding mechanisms?

The purchase and procurement phase

The purchase and procurement phase

A. Lien releases from subcontractors

B. Change orders, if applicable

C. Expenses from similar contracts

D. Inspection reports

C. Expenses from similar contracts

ooper is an intelligence professional for Whetstone Intelligence, a competitive intelligence firm. She is tasked with gathering intelligence about Cryptic Global, the major competitor of Whetstone's biggest client. To gather the intelligence, Cooper infiltrates Cryptic Global's office by posing as a member of its cleaning crew and collects information left around employees' computers and desks. Cooper's approach is an example of:

A. Dumpster diving

B. Shoulder surfing

C. Spoofing

D. Scavenging

D. Scavenging

___________ involve paying individuals to undergo unnecessary medical procedures that are then billed to the patient's insurer or health care program.

A. False cost reporting schemes

B. Rent-a-patient schemes

C. Fictitious patient schemes

D. DRG creep schemes

So-called rent-a-patient schemes involve

B. Rent-a-patient schemes

Which of the following health care frauds would be best described as a fictitious services scheme?

A. A doctor uses the identifying information of patients he has never serviced to bill an insurer.

B. A patient who is not insured pretends to be an insured party to receive medical services.

C. A doctor intentionally submits a bill to an insurer using improper codes for the services provided.

D. A patient fraudulently reports symptoms he does not actually have to receive a prescription.

A. A doctor uses the identifying information of patients he has never serviced to bill an insurer.

Samantha operates a medical lab from a mobile trailer. Her business model is to go to an area, recruit patients for an array of unnecessary tests, and bill health care programs for those tests. She also typically bills for services never actually performed using the patient data collected. Soon after, she moves the trailer to a new location and starts the process again. Which of the following best describes Samantha's scheme?

A. Rolling lab

B. Fictitious provider scheme

C. DME fraud

D. Front organization

A. Rolling lab

Which of the following is NOT a common red flag of a bid tailoring scheme?

A. Competitive awards vary among several suppliers.

B. A contract is not rebid even though fewer than the minimum number of bids are received.

C. Only a few bidders respond to bid requests.

D. There are unusually broad specifications for the type of goods or services being procured.

A. Competitive awards vary among several suppliers.

Which of the following is NOT a method that is used to conceal inventory shrinkage?

A. Selling merchandise without recording the sale

B. Writing off stolen inventory as scrap

C. Placing empty boxes on warehouse shelves

D. Performing a forced reconciliation of the inventory records

A. Selling merchandise without recording the sale

Which of the following types of procurement fraud schemes involves procurement employees who convince their employer, the procuring entity, that it needs excessive or unnecessary products or services?

A. Need recognition schemes

B. Bid manipulation schemes

C. Nonconforming goods schemes

D. Bid tailoring schemes

A. Need recognition schemes

Brittany, a cash register teller, signed onto her register, rang a "no sale" transaction to open the drawer, and then removed a large sum of money. Which of the following schemes has taken place?

A. A register disbursement scheme

B. A cash larceny scheme

C. A skimming scheme

D. None of the above

B. A cash larceny scheme

White, an employee of ABC Corporation, intentionally issued two payments for the same invoice. After the checks had been mailed, White called the vendor and explained that a double payment had been made by mistake. She asked the vendor to return one of the checks to her attention. When the vendor returned the check, White took it and cashed it. This is an example of:

A. A pay and return scheme

B. A receivables skimming scheme

C. A shell company scheme

D. A pass-through scheme

A. A pay and return scheme

The quick ratio is used to determine the efficiency with which a company uses its assets.

A. True

B. False

false

The quick ratio is a measure of how well a company can meet its short-term financial liabilities