Research has shown that _____________ detect most frauds
A. Auditors
B. Customers
C. Vendors
D. Employees
D
All of the following are methods that organizations can adopt to proactively eliminate fraud opportunities EXCEPT:
A. Accurately identifying sources and measuring risks
B. Implementing appropriate preventative and detective controls
C. Creating widespread
D
Audits, public record searches, and net worth calculations are used to cater what type of evidence in fraud investigation?
A. Testimonial
B. Forensic
C. Documentary
D. Observational
C
Which of the following is NOT a part of the evidence square?
A. Management evidence
B. Documentary evidence
C. Testimonial evidence
D. Physical evidence
A
All of the following factors can be associated with high levels of fraud and detract from a positive work environment EXCEPT:
A. top management that does not pay attention to behavior of employees
B. lack of recognition of job performance
C. unrealistical
D
Which of the following approaches is most useful in creating a culture of honesty and integrity in the workplace?
A. Hiring right kind of employees
B. Security cameras
C. Peer evaluations
D. Ergonomics
A
Which of the following is a component of the evidence square?
A. Rationalization
B. Perceived pressure
C. Personal observation
D. Perceived opportunity
C
Civil suits are usually quite rare in cases of employee fraud because:
A. there is usually not enough evidence to prosecute
B. employe fraud is a victimless crime
C. it is difficult for a jury to unanimously decide on a conviction
D. perpetrators have usu
D
Which of the following key activities related to fraud, is the most important and cost-effective way to reduce losses from fraud?
A. Follow-up legal action
B. Early fraud detection
C. Fraud investigation
D. Fraud prevention
D
Which of the following elements listed is one of the three basic elements of the fraud motivation triangle?
A. Concealment
B. Theft Act
C. Opportunity
D. Conversion
C
Communicating expectations about honesty and integrity throughout a company includes all of the following elements EXCEPT:
A. identifying appropriate values and ethics
B. fraud awareness training
C. consistent punishment for violators
D. insisting that to
D
In an organization, individuals who suspect fraud usually don't come forward because they:
A. feel that the perpetrator will get caught anyway
B. do not want to accuse someone
C. fear being branded a whistle blower
D. will lose the friendship of the perpe
C
Studies show that the legal action against fraudsters is typically taken:
A. Less than 25% of the time
B. Less than 50% of the time
C. More than 75% of the time
D. At least 50% of the time
B
Which of the following is NOT one of the ways in which a fraud investigation must be conducted?
A. Investigators should be experienced and objective professionals
B. Investigators should closely guard all hypotheses regarding guilt or innocence of individ
C
Stuart, a CFE, is investigating a possible management fraud. He found an email on an employee's computer to use as evidence in the case. Under which category of evidence would an email message fall?
A. Testimonial evidence
B. Documentary evidence
C. Physi
B
Organizations and individuals that have proactive fraud prevention measures usually find that their prevention efforts:
A. help in training employees about appropriate behavior
B. often prompt smaller frauds
C. pay big dividends
D. aid in punishing fraud
C
When perceived pressures and(or) opportunities are low, a person needs more ________ to commit fraud.
A. support from people at workplace
B. rationalization
C. courage
D. motivation
B
Recent research has shown that there is an ethical maturity model (EMM) that explains why people make unethical decisions, and there are four levels in it. Which of the following level is NOT one among them.
A. Personal ethical understanding
B. Corporate
B
Recent research has shown that there is an ethical maturity model (EMM) that explains why people make unethical decisions. Which of the following represents the foundation of ethics according to this model?
A. Personal ethical understanding
B. Ethical cou
A
A person may have very strong ethics in the way he or she treats family and friends, but not understand how failure to submit tax withholdings to the government affects peoples' lives or constitutes unethical or fraudulent behavior. This is an ethical iss
D
Which level in the ethical maturity model can be summarized as "willingness to pay the price for ethics"?
A. Ethical positioning
B. Ethical courage
C. Personal ethical understanding
D. Application of ethics to business situations
B
Which is the highest level in the ethical maturity model?
A. Ethical leadership
B. Ethical courage
C. Personal ethical understanding
D. Application of ethics to business situations
A
Which of the following is the largest employee group in most organizations?
A. Employees who display ethical leadership
B. Group of employees who will always be honest
C. Group of employees who will be dishonest anytime it benefits them
D. Swing group of
D
Which of the following is true of the "swing group" of employees in organizations?
A. Individuals in this group have situational ethics
B. Individuals in this group are dishonest most of the time
C. Individuals in this group do not know how to translate t
A
Research on honesty shows that individuals fall into three groups:
(1) those who will always be honest
(2) those who are situationally honest
(3) those who will always be honest
Which of these group is (are) the biggest?
A. Group 1 (50%)
B. Group 2 (40%)
B
Which legislation makes it compulsory for every public company to have a code of conduct to convey expectations about what is and is not appropriate for its directors and officers?
A. Sherman Act
B. Glass Steagall Act
C. Sarbanes Oxley Act
D. Gramm Leach
C
Which of the following statements is TRUE?
A. External auditors are usually specifically trained to detect fraud
B. Audits of books and records rarely discover frauds
C. Less than 5 percent of all frauds are detected by auditors
D. The presence of auditor
D
In the ethical maturity model, instilling in others a desire to develop ethical awareness and courage is referred to as:
A. Personal codes of ethics
B. Ethical motivation
C. Ethical leadership
D. Application of ethics to business situations
C
In the past, most frauds were detected:
A. by surveillance and undercover operations
B. by accident
C. by providing ways for people to report suspicions of fraud
D. by examining transaction records and documents if there are anomalies that could represent
B
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:
A. install reporting hotlines
B. conduct undercover operations
C. install s
A
Which of the following is an example of a whistle blowing system?
A. Bulletin board service
B. Supervisor intervention
C. Removing middle management layer
D. Fraud reporting hotline
D
Which of the following is a prerequisite for a fraud investigation?
A. Predication
B. A specific allegation of fraud against another party
C. Consistent bottom-line improvement
D. Rationalization
A
Although there are multiple approaches to fraud investigation, most investigators tend to rely heavily on _____________.
A. invigilation
B. surveillance
C. interviews
D. confrontation
C
Which type of evidence is gathered from individuals using investigative techniques such as interviewing, interrogation, and honesty tests?
A. Documentary evidence
B. Testimonial evidence
C. Physical evidence
D. Personal observation
B
What is the overall term for the investigative technique that includes gathering evidence through data mining, audits, computer searches, net worth calculations, and financial statement analysis?
A. Documentary evidence
B. Testimonial evidence
C. Physical
A
Investigative techniques under which approach include invigilation, surveillance, and covert operations?
A. Documentary evidence
B. Testimonial evidence
C. Physical evidence
D. Personal observation
D
All of the following are part of the fraud element triangle EXCEPT:
A. Theft act
B. Concealment
C. Conversion
D. Rationalization
D
Investigative methods utilized to catch a fraud perpetrator while he/she is actually receiving a kickback fall under which of the following categories?
A. Theft act investigative methods
B. Concealment investigative methods
C. Conversion investigative met
A
Which areas of investigative methods involve searching for ways in which perpetrators have spent or used their stolen assets?
A. Theft act
B. Concealment
C. Conversion
D. Collusion
C
The gathering of this type of evidence in a fraud investigation often involves forensic analysis by experts.
A. Documentary evidence
B. Testimonial evidence
C. Physical evidence
D. Personal observation
C
The most effective way to involve employees in the monitoring process is to provide a protocol for which of the following?
A. communication
B. office etiquette
C. administrative action
D. management oversight
A
__________ refers to the circumstances, taken as a whole, that would lead a reasonable, prudent professional to believe a fraud has a occurred, is occurring, or will occur
A. Audit process
B. Surveillance
C. Predication
D. Investigation
C
Which of the following statements is NOT true?
A. It is much more difficult to get a criminal conviction than it is to get a judgment in a civil case
B. A preponderance of the evidence (more than 50 percent) is necessary to win a civil case
C. Criminal co
C
Which one of the following was NOT discussed as a way to create a culture of honesty and integrity?
A. Offer rewards for honest behavior
B. Communicate expectations throughout the organization
C. Hire the right kinds of employees
D. Create a positive work
A
Research in moral development strongly suggests that honesty can be best reinforced when:
A. expectations of honesty are implied
B. fraud perpetrators are given a second chance
C. appreciation is exhibited for honesty
D. a proper example is set by managem
D
Which of the following is NOT true regarding why fraud prevention controls are important?
A. Preventing fraud also saves the family of the perpetrator from embarrassment (guilt by association)
B. Once the fraud has been committed, the cost of any legal ac
D
Which of the following is a result of the presence of fraud prevention controls within an organization?
A. Employees are less likely to commit fraud
B. The organization bonding insurance company will reduce its rate based on the controls in place
C. The a
A
Which of the following is NOT a proactive hiring procedure?
A. conducting background investigations on prospective employees
B. instilling in employees a desire to develop ethical awareness and courage to do the right thing
C. thoroughly checking referenc
B
According to the text, which of the following is a consideration that influences the risk of fraud when identifying a company's fraud risks?
A. current organization employee demographics
B. top management personal characteristics
C. industry characteristi
C
Which of the following questions should be answered when considering fraud risk and fraud prevention?
A. which types of fraud are the easiest and least costly to prevent
B. which employees are in the best position to commit fraud
C. which symptoms of a fr
B
Which of the following is true of why fraud should be detected early?
A. Most frauds start small and get larger over time
B. Determining motive is a strong tool to prevent similar frauds in the future
C. When top management is the perpetrator, prevention'
A
Which of the following is NOT a primary way fraud can be detected early?
A. by accident
B. finding anomalies in the financial records
C. someone reports suspicious activity
D. watching those employees whose honesty test results were suspicious
D
Which of the following is a possible indication that fraud may be present?
A. An employee's spouse is diagnosed with Alzheimer's disease
B. An employee's lifestyle changes suddenly
C. An employee's spouse has a serious vehicle accident
D. An employee repo
B
Which of the following is true about whistle blowing?
A. Whistle blowers are respected by colleagues
B. Whistle blowing is a good way to get back at a coworker
C. Whistle blowing systems should include an anonymous hotline
D. Whistle blowing usually provi
C
Which of the following is true about legal action taken by organizations who are the victims of fraud?
A. Legal action is taken in fewer than half of frauds committed
B. Legal criminal action is brought by the victim organization
C. Civil action is a good
A
Which of the following is FALSE concerning legal actions by organizations regarding fraud?
A. Legal action is expensive
B. Legal action is time consuming
C. Legal action is sometimes embarrassing
D. Legal action stops future frauds
D