Fraud - Exam 2 - Quiz Questions

In a civil trial, settlements may be negotiated: Select one: A. at any time during the litigation B. after arraignment C. at no time once negotiation begins D. only after the judge orders negotiation between parties.

A

Which of the following is among the do's and don'ts" suggested in the text for expert witnesses during a deposition or trial? Select one: A. Answer questions honestly and convincingly. B. Memorize answers to questions you expect to be asked in order to minimize the chances for mistakes. C. Bluffing is often a good strategy if you are not sure of an answer since an expert should be well-versed in most topics posed to him/her. D. Respond to statements, observations, and questions.

A

Which of the following is the major reason why there is so much divorce fraud? Select one: A. assets are being taken away from one divorce partner and given to another B. divorce proceedings usually take a long time C. states make divorces very difficult D. children usually get most assets in divorce cases

A

During a trial or deposition, expert witnesses should: Select one: A. respond aggressively B. bring notes and work papers to cite C. answer questions convincingly, without hedging their answers D. memorize well-crafted responses to say what they think sounds effective.

C

Arrange in order the stages that people generally go through in reaction to a crisis. I. Anger II. Denial III. Acceptance IV. Depression V. Rationalization Select one: A. I, II, III, IV, V B. I, II, V, III, IV C. II, V, IV, I, III D. II, I, V, IV, III

D

Proactively searching for analytical symptoms related to financial statement fraud means that we are looking for accounts that appear: Select one: A. too low B. too high C. unusual D. all of the answers.

D

Identifying fraud exposures is one of the least difficult steps in detecting financial statement fraud. Select one: True False

F

The general tone of a fraud report should be neither accusatory nor conclusive as to guilt, even if the suspect has confessed his or her involvement in the crime. Select one: True False

T

Biometrics: Select one: A. use unique features of the human body to create secure access controls B. include a signature sent over the internet C. use "Security through Obscurity" to prevent unauthorized access to networks D. include Trojan horses, cross site scripting (CSS), and database query (SQL) injections.

A

Consumers should provide credit card numbers or bank account information over the telephone only when: Select one: A. they initiated the call and are purchasing a legitimate product B. they are asked to give the information C. the entity receiving this information is a legitimate company D. they feel confident that the receiving entity will protect such information.

A

Each of the following is a symptom relating to understatement of liability frauds except: Select one: A. original purchase-related records where copies could exist B. denied access to records, facilities, certain employees, customers, vendors, or others from whom audit evidence might be sought C. last-minute adjustments by the entity that significantly affect financial results D. missing documents.

A

Fidelity bonds include all of the following except: Select one: A. Contingent Blanket Bond B. Name Schedule Fidelity Bond C. Blanket Position Bond D. Primary Commercial Blanket Bond.

A

Fraud investigators can assist in a case in are of the following ways except: Select one: A. by investigating the fraud B. by preparing questions to ask opposing witnesses during depositions C. by evaluating whether documents produced by the opposing side satisfy a production request D. by assisting in the preparation of a production request because of their knowledge of a case.

A

Identify which ratio is correctly linked to the information it could reveal about the company' potential for revenue fraud: Select one: A. gross profit margin - this ratio will increase if management overstates inventory B. sales return percentage - a sudden decrease in this ratio can mean that customer discounts are not being recorded in the accounting records C. allowance for uncollectible accounts as a percent of receivables - when a company records fictitious receivables, this ratio increases D. operating profit margin - a dramatic decrease in this ratio could indicate fraud.

A

In liability fraud, liabilities are most often: Select one: A. understated B. overstated C. recorded as assets D. recorded as expenses

A

Interviewing as discussed in the textbook is: Select one: A. the systematic questioning of individuals who have knowledge of events, people, and evidence involved in a case under investigation B. the process of answering questions from an interviewer for the purpose of finding a job C. by far the least common technique used in investigation and resolving fraud D. similar to ordinary conversation.

A

Of the following, the most difficult account for management to intentionally misstate is: Select one: A. Cash B. Income Taxes Payable C. Securities D. Prepaid Expenses

A

Overstating cash is usually difficult because: Select one: A. cash balances can be easily confirmed with banks and other financial institutions B. cash is hard steal C. cash is normally not a fraudulent account D. cash is usually a small asset.

A

Phishing is the method of: Select one: A. using e-mail or other Internet applications to deceive people into disclosing valuable personal information B. convincing a person to divulge personal information over the telephone C. hacking into another's computer files to access personal information D. hiring a con artist to steal personal information from a person.

A

Planning for interviews should not involve: Select one: A. judging the guilt of the suspect based on available documents B. establishing a location and time for the interview C. ascertaining in advance as many facts as possible about the offense D. understanding the attitude of the interviewee.

A

The Criminal Investigation division's chief responsibility is to: Select one: A. detect taxpayers who willfully and intentionally violate their known legal duty of voluntarily filing an income tax return B. check the accuracy of tax returns C. detect fraud in public corporations' tax filings D. detect fraud in U.S. citizens' tax filings.

A

The Gram-Leach-Bliley Act gives you the right to: Select one: A. opt out of having your personal information sold to organizations B. receive a yearly stipend to cover the losses incurred as a victim of identity fraud C. claim your high credit report although an identity fraudster has damaged it severely D. sue the perpetrator for more money than he or she defrauded from you.

A

What does "https" stand for? Select one: A. hypertext transfer protocol (secure) B. hypertext transfer point (sight) C. hypertext transfer protocol (system) D. hypertext transfer protocol (sign)

A

Which of the following investigative methods would most likely be used more in divorce cases than in bankruptcy cases? Select one: A. surveillance B. public records searches C. subpoena of private records D. interviews

A

Which of the following is a major difference between larceny and skimming? Select one: A. Larceny is committed after the cash is entered into the accounting system, while skimming is committed before the cash is entered into the system. B. Larceny is committed before the cash is entered into the accounting system, while skimming is committed after the cash is entered into the system. C. Larceny involves fraudulent disbursements of cash, while skimming involves fraudulent receipts of cash. D. Larceny involves fraudulent receipts of cash, while skimming involves fraudulent disbursements of cash.

A

"Is this the first time you have taken from the company? Is this the first time you have created an overdraft?" These are examples of what type of questions? Select one: A. open B. accusatory C. assessment D. calibrating

B

"Putting someone on the payroll who does not actually work for the victim company" is an example of a(n): Select one: A. expense scheme B. payroll scheme C. register disbursement scheme D. commission scheme

B

A Trojan Horse: Select one: A. sends email or pop-up messages to users asking for personal information in inventive ways B. is a program that claims to do something useful, but which also contains hidden behavior C. changes information in an email header or an IP address to hide identities D. all of the choices are true regarding Trojan horses.

B

All of the following ratios are useful in detecting large revenue frauds except: Select one: A. gross profit margin B. current ratio C. working capital turnover D. accounts receivable turnover.

B

E-business transactions make it easier to commit which of the following types of fraud? Select one: A. kickbacks B. customer impersonation C. setting up dummy companies D. stealing petty cash

B

Each of the following assets is correctly linked with how it can be overstated except: Select one: A. inventory can be overstated by improperly capitalizing these assets B. marketable securities can be overstated because they are not widely traded, and it is difficult to assign an accurate value to the securities C. fixed assets can be overstated by leaving expired assets on the books D. assets can be inflated in mergers, acquisitions, and restructurings by having the wrong entity act as the acquirer.

B

The discovery stage of a civil case includes: Select one: A. the filing of a counterclaim by the defendant B. depositions and subpoenas C. the defendant requesting, and receiving, a jury trial D. all of the choices are true of the discovery stage of a civil case.

B

What is one way to determine if a website is secure or not? Select one: A. look for the official logo of the company you want to deal with B. look for an "s" after the "http" in the URL of the Web site C. click on a link to see if it works D. call the FTC and ask about the ISP address of the Web site

B

Which of the following honesty testing techniques deals with the study of handwriting for the purpose of character analysis? Select one: A. polygraph B. graphology C. pencil-and-paper test D. voice stress

B

Which of the following is not a fraud risk unique to e-business transactions? Select one: A. innovative technologies where security lags process development B. selling new products C. complex information systems D. removal of personal contact

B

Which of the following statements is true? Select one: A. Most fraud cases are tried in federal courts. B. Civil cases can be heard by judges or juries consisting of at least six jurors. C. State courts hear bankruptcy cases. D. Parties in a civil case cannot negotiate a settlement during the litigation process.

B

"Wartrapping" is: Select one: A. using a key to "lock" a message and another key to "unlock" it B. a signature sent over the internet C. a "free" internet access point set up by hackers and used to steal passwords and other important information D. illegal or unauthorized viewing of information as it passes along a network communication channel.

C

All of the following are specific guidelines for a successful interviewer, except: Select one: A. maintain full control of the interview B. require direct responses C. utilize leading questions D. clearly understand each answer before continuing with the interview.

C

FAS 5 requires contingent liabilities to be recorded as liabilities on the balance sheet if the likelihood of loss or payment is: Select one: A. remote B. reasonably possible C. probable D. not determinable.

C

If you become a victim of identity theft, you should first: Select one: A. wait to see where the perpetrator is spending your money; then, using this information, plan an investigation with the local FBI organization B. contact friends and neighbors to inquire if they have any useful information about the perpetrator C. contact the Federal Trade commission for assistance and advice D. do none of the suggestions provided.

C

Secure web connections are based on: Select one: A. DNS B. FTP C. HTTPS D. FTPS.

C

The asset turnover ratio measures: Select one: A. the average time an asset is used by the company B. the average useful life of capital assets C. sales that are generated with each dollar of the assets D. assets that are purchased with each dollar of sales.

C

The stage of the money laundering process that includes making wire transfers between various accounts or changing the money's currency is called the: Select one: A. integration stage B. placement stage C. layering stage D. insertion stage.

C

Which of the following depicts the correct progression of a case through the federal court system? I. Supreme Court II. Circuit Court of Appeals (one of twelve) III. U.S. District Court Select one: A. I, II, III B. II, I, III C. III, II, I D. I, III, II

C

Which of the following institutions would not be very helpful to call in the event of identity theft? Select one: A. IRS B. Social Security Administration C. local chamber of commerce D. a credit reporting agency

C

Which of the following is not a good thing to do during an interview? Select one: A. conduct the interview in private B. establish the purpose of the interview C. interview more than one person at once D. do not invade body space

C

Which of the following is not a way that individuals can commit tax fraud? Select one: A. overstating the amount of deductions B. keeping two sets of books C. paying the least amount of taxes the individual owes D. making false entries in books and records

C

Which of the following is true of both civil and criminal law? Select one: A. a plaintiff must prove the "preponderance of the evidence" to be successful B. juries may have between 6-12 jurors C. plaintiffs and defendants may call expert witnesses D. all of the choices are true of both civil and criminal law

C

Which of the following reactions frequently involves appearing temporarily stunned, insisting there is some mistake, or not comprehending what has been said? Select one: A. anger B. rationalization C. denial D. depression

C

An interrogatory is: Select one: A. a means of securing documents in the other party's possession that are relevant to the case B. the response to the complaint that denies or admits various allegations C. a written order in the name of the court requiring a witness to give testimony at a trial D. a series of written questions that specifically identify information needed from the opposing party.

D

E-business presents unique pressures and opportunities for fraud including: Select one: A. proven business models that generate cash flows B. extensive personal contact which increases customer satisfaction with the purchase C. heightened privacy due to the ability to conduct business from home or office D. lack of "brick-and-mortar" and other physical facilities.

D

If an audit reveals that an individual has underpaid his or her taxes, the auditor: Select one: A. can assess civil fines B. can assess penalties C. can refer the case to the CI division D. can do all of the answers given.

D

The person appointed by a bankruptcy judge in a Chapter 11 proceeding who investigates allegations of fraud or misconduct by the debtor or its principals is a(n): Select one: A. creditor B. adjuster C. auditor D. examiner

D

The retention of a fraud investigator in a bankruptcy proceeding must be approved by the bankruptcy judge unless: Select one: A. the debtor's estate pays the investigator B. the trustee pays the investigator C. the creditors' committee pays the investigator D. an individual creditor or shareholder pays the investigator.

D

The value of data lies in its ability to be easily: Select one: A. converted to money B. replicated C. transferred D. all of the answer choices given.

D

To work as an entry-level CI special agent: Select one: A. you must be a U.S. citizen B. you must not be older than 37 years of ages C. you must have completed a four-year course of study or earned a bachelor's degree D. you must meet all of the conditions provided.

D

Which of the following factors does not make fraud more difficult to detect? Select one: A. collusion with outsiders B. forgery, which GAAS auditors are not routinely trained to detect C. off-book frauds in which no records on the company's books are fraudulent D. all of the choices provided make fraud more difficult to detect

D

Which of the following is not an element of a company's control environment? Select one: A. audit committee participation B. management's philosophy C. hiring policies D. independent checks

D

Which of the following results in the highest loss per case? Select one: A. expense tampering B. payroll schemes C. register disbursement schemes D. billing schemes

D

Which of the following types of controls is least often used to protect IT processing equipment? Select one: A. physical controls B. authorization controls C. independent checks or reference D. documents and records

D

As a general rule, it is usually best to conduct all interviews in the fraud examiner's office so that distractions are minimized. Select one: True False

F

Financial statement frauds most often occur in large, well-established companies. Select one: True False

F

A person acting as an officer in a bankruptcy case is prohibited from purchasing any property of the debtor's estate. Select one: True False

T

Accrued liabilities are important accounts to look at when searching for fraud because it is easy to understate liabilities in these accounts. Select one: True False

T