Reference no: EM132482128

Questions -

Q1. Company X has a good whistle-blowing program in place. Sarah used the whistle-blowing system to alert management about a fraud being committed by a senior employee in the human resources department. The company investigated the allegation and punished the fraudster. However, Sarah was shocked to find later that one on her team knew that she was the one who blew the whistle. What could be a major issue with the program at the company?

A. Unclear policies regarding whistleblowing.

B. Lack of awareness about the program.

C. Management action regarding anonymity policies.

D. Lack of adherence to anonymity policies.

Q2. In which stage does auditors have a good chance of detecting fraud if the audit samples include altered documents and miscounts?

A. Theft Act

B. Concealment

C. Conversion

D. Layering

Q3. Recording an expense to conceal fraud involves making a fictitious journal entry. A faulty journal entry is an example of which fraud symptom?

A. Accounting anomaly

B. Internal control weakness

C. Unusual behavior

D. Analytical anomaly

Q4. The proactive method of fraud detection is a six-step process. Which of the following is the correct process sequence?

A. Identify possible frauds that could exist; catalog possible fraud symptoms; understand the business; use technology to gather data about symptoms; automatic detection procedures; analyze results; and investigate symptoms.

B. Catalog possible fraud symptoms; understand the business; identify possible frauds that could exist; analyze results; use technology to gather data about symptoms; and investigate symptoms.

C. Understand business; identify possible frauds that could exist; catalog possible fraud symptoms; investigate symptoms; use technology to gather data about symptoms; and analyze results.

D. Understand the business; identify possible frauds that could exist; catalog possible fraud symptoms; use technology to gather data about symptoms; analyze results; and investigate symptoms.

Q5. Which of the following is the most direct method of focusing on changes in the company's balance sheet and income statement?

A. Calculating key ratios and comparing them from period to period.

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

C. Performing a vertical analysis.

D. Performing a horizontal analysis.

E. None of the above

Q6. Which of the following is an analytical symptom of a kickback?

A. Decreasing purchases from other vendors.

B. Charging normal price for goods supplied.

C. Providing better quality goods.

D. Smaller purchase quantities and more frequent orders.

Q7. Digital analysis is:

A. The art of analyzing the digits that make up numbers like invoice amounts, reported hours, and costs.

B. A technique which calculates the average probability for each grouping of data.

C. The searching for expected relationships between numbers.

D. The use of numeric values for decision making.

Q8. When investigating fraud, investigators should usually interview suspects:

A. At the beginning of the investigative process to really put the heat on them.

B. In the middle of the investigative process to make them feel that they are not really a suspect.

C. At the end of the investigative process so that they can gather sufficient evidence against them.

D. Any time during the investigative process to avoid creating undue stress and suspicion among other employees.

Q9. What is invigilation?

A. A theft investigation technique which records the physical evidence, facts, and movements, which form part of a fraud.

B. A theft investigation technique which involves close supervision of the suspects during the examination period.

C. A theft investigation technique which is used when large scale fraud is likely and other methods of investigation fail.

D. A theft investigation technique which involves confiscating and searching computers and other electronic sources of information.

E. None of the above

Q10. An investigator locates the scene that should be observed, anticipates the action that is most likely to occur at the scene, and keeps detailed notes on all activities involving the suspect. Which type of surveillance is being used here?

A. Static surveillance.

B. Electronic surveillance.

C. Stationary surveillance.

D. Moving surveillance.

Q11. Undercover operations are costly and time-consuming and should be used with extreme care. In which of the following situations would it be ineffective to conduct an undercover operation?

A. When law enforcement authorities are informed.

B. When the investigation can be closely monitored.

C. When other investigation methods are available.

D. When the investigation can remain secretive.

Q12. Several factors are considered in deciding whether or not to investigate fraud. Which of the following is NOT one of them?

A. The signal that investigation or noninvestigation will send to others in the organization.

B. Perceived cost of the investigation.

C. Exposure or amount that could have been taken.

D. Perceived strength of the predication.

E. Preparation of a surveillance log.

Q13. Which of the following is an analytical fraud symptom?

A. Increase in past due accounts receivable.

B. Significant increase or decrease in account balances.

C. Lack of independent checks.

D. Excessive voids or credits.

Q14. What is used in court cases to prove that data has not been adversely affected during analysis?

A. Arithmetic mean.

B. Deviation measure.

C. Random sampling.

D. Checksums.

Q15. Electronic surveillance may have only limited value in the investigation of employee frauds and many other white-collar crimes. Why?

A. Lack of adequate technology.

B. Concerns regarding employees' privacy.

C. Prohibitively high cost of installation and maintenance.

D. Relative ease of tampering with evidence.

Q16. Which step in the electronic evidence collection process is important to ensure that the original disk is kept in the seized state?

A. Evidence mapping

B. Search

C. Seizure

D. Cloning

E. None of the above

Q17. Which of the following observations concerning physical evidence is TRUE?

A. It's not useful in fighting fraud cases.

B. It is more associated with nonfraud types of crimes.

C. It is useful in fraud cases because fraud has physical symptoms.

D. It does not involve electronic sources of information.

Q18. There are three simple procedures that small business owners should do on a timely basis to prevent fraud when they can't afford sufficient employees to guarantee effective segregation of duties. Which of the following is NOT one of them?

A. Pay everything by check so that there is a record.

B. Always open the bank statement and reconcile the statements themselves.

C. Allow one key employee to operate the bank account personally.

D. Sign every check themselves and not delegate the signing to anyone else.

E. Receive company bank statements at the home mailing address (of the owner)

Q19. Which of the following is the foundation for all other components of internal control, providing discipline and structure?

A. open-door policy

B. Control environment

C. Whistle-blowing system

D. Surveillance

Q20. Fraud examiners must be able to recognize signals that a journal entry may have been manufactured to conceal a fraud. Which of the following is a common journal entry fraud symptom?

A. Journal entries with documentary support.

B. Journal entries that balance.

C. Adjustments to receivables or payables that are made monthly.

D. Journal entries made near the end of an accounting period.