AIS Exam 3- Chapter 8: Fraud

Once fraud has occurred, which of the following will reduce fraud losses? (Select all correct answers.)

-insurance -regular backup of data and programs -contingency plan

Which of the following conditions is/are usually necessary for a fraud to occur? (See the Fraud Triangle in Figure 8-1.)

A Pressure, Opportunity, and Rationalization

Which of the following is an example of output fraud?

A fraud perpetrator scanned a company paycheck, used desktop publishing software to erase the payee and amount, and printed fictitious paychecks.

Fraud is gaining an unfair advantage over another person. Legally, for an act to be fraudulent there must be:

An intent to deceive

Which of the following is an example of how a fraud perpetrator would rationalize his actions?

Belief that no one is going to be harmed.

After a fraud has occurred, which one of the following is the best way to reduce the loss from that fraud?

Collect on fraud insurance purchased before the fraud

A programmer at a large bank inserted code into the company's computer system that told the computer to not only ignore any overdrafts on his accounts, but to not charge his accounts any late or service fees. This is an example of what type of fraud?

Computer instruction fraud

A hacker was able to break into the system that transmitted the daily transactions of a retail store to the company's central office. Every night for several weeks he copied the transaction data that included customer names, credit card numbers, and other confidential data. Hundreds of thousands of customers were affected. This is an example of what type of fraud?

Data fraud

Which of the following causes the majority of computer security problems?

Human Errors

A woman sent her company fictitious medical bills from doctors who did not exist. The bills were processed in the normal way by her employer, and payments went to her husband's office address. She bilked her company out of millions of dollars. This is an example of what type of fraud?

Input fraud

Misappropriation of assets is an example of what type of accounting information threat?

Intentional acts

The text mentions four different AIS threats. Which type of threat is sabotage?

Intentional acts

Organizations can increase the difficulty of committing fraud by all of the following except:

Maintaining adequate insurance.

Terrorist attacks are considered which type of threat?

Natural and political disasters

Employees at a large brokerage house used their employer's computer system to run a large and lucrative side business that their employer knew nothing about. This is an example of what type of fraud?

Processor fraud

Power outages and fluctuations can result in which type of threat?

Software errors and equipment failures

Which of the following is not an example of asset misappropriation?

The controller of the company falsely adds $50 million to accounts receivable.

Which of the following statements is false?

The psychological profiles of white-collar criminals are significantly different from those of the general public.

According to the text, which type of threat represents the greatest risk to information systems and causes the greatest dollar losses?

Unintentional acts

Logic errors is an example of what type of AIS threat?

Unintentional acts

Threats that arise from human carelessness, failure to follow established procedures, and poorly supervised personnel are which type of threat?

Unintentional acts

Which of the following is not one of the responsibilities of auditors in detecting fraud according to SAS No. 99?

catching the perpetrators in the act of committing fraud

Unauthorized theft, use, access, modification, copying, or destruction of software, hardware, or data is called

computer fraud.

Which of the following is not an example of computer fraud? (See the "Computer Fraud Classifications" section of the chapter.)

failure to perform preventative maintenance on a computer

Which type of fraud is associated with 50% of all auditor lawsuits?

fraudulent financial reporting

Which of the following is a fraud in which later payments on account are used to pay off earlier payments that were stolen?

lapping

Which of the following control procedures is most likely to deter lapping?

periodic rotation of duties

Which of the following is the most important, basic, and effective control to deter fraud?

segregation of duties

Organizations can make fraud less likely to occur by requiring an annual employee ____________

to vacation.

Individuals who perpetrate fraud are often referred to as

white-collar criminals.