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Policy > CFE > Flashcards

CFE Flashcards

1
Q

In Cressy’s fraud triangle, its three of the legs are Opportunity, Pressure, and ___?

A

Rationalization

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2
Q

Which of the following offender types are people who take the money and run?

A

Absconders

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3
Q

When situational pressures and perceived opportunities are low and personal integrity is high, occupational fraud is much more likely to occur than when the opposite is true. T/F

A

False

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4
Q

White collar crime is also known as ___ ___?

A

Occupational fraud

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5
Q

___ ___ can be defined as conduct detrimental to the organization and to the employee.

A

Employee deviance

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6
Q

According to a survey, in principal perpetrator, males in a majority of cases account for __ percent of fraud versus __ percent in which a female was the primary culprit.

A

61 percent

39 percent

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7
Q

The principal way to detect omitted credits from books of account is through?
___ ___

A

Trend analysis

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8
Q

Complying with ___ ___ is not a reason why senior management would overstate business statements.

A

Debit covenants

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9
Q

What are the four basic measures, if properly installed and implemented that may help prevent inventory fraud?

A

Proper documentation,
Segregation of duties,
Independent checks,
Physical safeguards.

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10
Q

What are the four classifications for corruption?

  • Bribery
  • Economic extortion
A

Illegal gratuities

Conflicts of Interest

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11
Q

The most common method of detection in corruption cases is?

A

Tips

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12
Q

Undisclosed payments made by vendors to employees of purchasing companies are referred to as?

A

Kickbacks

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13
Q

Every bribe is a two-sided transaction, in which where a vendor bribes a purchaser, there is someone on the vendor’s side of the transaction who is not making an illicit payment. T/F

A

False

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14
Q

What is the process that all bidders are legally supposed to be placed on the same plane of equality, bidding on the same terms and conditions?
___ ___

A

Competitive bidding

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15
Q

The more power a person has over the bidding process, the more likely the person can influence the selection of a supplier. T/F

A

True

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16
Q

When a victim company purchases unnecessary goods or services from a supplier at the direction of the corrupt employee, this results in?
___ ___ ___

A

A need recognition scheme

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17
Q

In which phase of competitive bidding process, are fraudsters attempt to influence the selection of a contractor by restricting the pool of competitors from whom bids are sought?

A

Solicitation

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18
Q

What is a way to eliminate competition in the solicitation phase of the selection process?
Solicit bid from ___ ___

A

fictitious suppliers

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19
Q

The person or persons who have access to ___ ___ are often the targets of unethical vendors seeking an advantage in the process.

A

Sealed bids

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20
Q

To ensure ___ ___ is not the reason to bribe employees of the purchaser.

A

Bid-splitting

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21
Q

__ __ means breaking a public work project or purchase of equipment, or supplies into segments.

A

Bid splitting

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22
Q

Collusion or bid-rigging between bidders is called?

A

Contract acceptance

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23
Q

A ___ __ ___occurs when an employee, manager, or executive has an undisclosed economic or personal interest in a transaction that adversely affects the organization.

A

Conflict of interest

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24
Q

The fraudster’s interest lies with an employee other than a company. T/F

A

False

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25
Q

A special scheme in which employees know their employer is seeking to purchase a certain asset and take advantage of the situation by purchasing the asset themselves is ___ ___ __ ___.

A

Turnaround sale or flip

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26
Q

___ is required if and when officers, executives or other persons in trusted positions become subjects of a criminal indictment.

A

Disclosure

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27
Q

Which are check tempering frauds in which an employee prepares a fraudulent check and submits it usually along with legitimate checks to an authorized maker who signs it without proper review?

A

Concealed check scheme

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28
Q

Maintain the presence of a manager or supervisor near the area of the cash register as a deterrent to theft is a prevention for ___ ___ ___.

A

Register disbursement scheme

29
Q

The most common method for billing scheme is ___?

A

Tips

30
Q

Which of the following is not the type of billing scheme?

A

Invoicing via accomplice companies

31
Q

A voucher is a file that includes the ___ ___ that was sent to the vendor, the vendor invoice listing the cost and quantity of items purchased, and the internal receiving reports that verify the purchased items have been ___.

A

Purchase order

Delivered

32
Q

A fabricated name and the post office box that an employee uses to collect disbursements from false billings is called a ___ ___.

A

Shell company

33
Q

One reason employees might be hesitant to use PO boxes in shell company schemes is that some businesses are specially vary of sending checks to vendors that have street addresses only. T/F

A

False

34
Q

Most of the shell company schemes involve the purchase of goods rather than services. T/F

A

False

35
Q

A person is said to be in ___ ___ act, when the business which he transacts, or the money or property which he handles, is not for his own benefit, but for another person.

A

Fiduciary Capacity

36
Q

Larceny by fraud or deception means that

  • Fails to correct a false impression
  • Fails to disclose a known lien, adverse claim or other legal impediment
  • ___ __ ___ __ ___ ___.
A

Creates or reinforces a false impression

37
Q

Which of the following are not of basic types of non-sharable problems?

A

Larceny by fraud

38
Q

According to Marshall, ___ are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.

A

Assets

39
Q

A tangible asset is one which is capable of being ___ __ ___

A

Perceived and or Appraised

40
Q

____ normally are carried on an organization’s books as expenses because they tend to be consumed by the organization within a year of purchase.

A

Supplies

41
Q

___ are the amounts which are owed to other entities.

A

Liabilities

42
Q

Asset misappropriations have an effect on the liabilities and do also have an indirect effect on the equity account. T/T

A

False

43
Q

Occupational fraud and abuse is a (an) ___ of doing business, in much the same way that we pay expenses for electricity, taxes, and wages.

A

Expense

44
Q

When expenses used to produce income all of them should be matched in a consistent manner against that income, this is referred to ___ ___ ___.

A

Accrual basis accounting

45
Q

Any expenses that are incurred but not paid by the end of the year are counted in our records of profit and loss, are called ___.

A

Accruals

46
Q

___ ___ is a process by which a bookkeeper records all transactions and can adjust the books.

A

Journal entries

47
Q

___ increase assets and expenses and/or decrease liabilities and/or equity.

A

Debit

48
Q

___ decrease assets and expenses and/or increase liabilities and/or equity.

A

Credit

49
Q

Delivery has not occurred or services have not been rendered when?

A

A written order exists but contains a right of return.

50
Q

___ and ___ are used to increase (or decrease) the equity account.

A

Journal entries and transactions

51
Q

By removing a tangible asset from the business (a debit), the books will be __ __ __ by the exact amount of the tangible asset misappropriated.

A

Out of balance

52
Q

Once the expense account is closed, it becomes a historical item and probably will never be reviewed again. T/F

A

True

53
Q

According to fraud tree, cash has the 3 following schemes.

  • Fraudulent disbursements
  • ___ ___
  • ___
A

Skimming

Cash larceny

54
Q

Skimming cases are more likely to be detected by ___.

A

Accidents

55
Q

The most basic skimming scheme occurs when an employee sells goods or ___ to a customer, collects the customer’s payment, but makes no record of the ___.

A

services

sale

56
Q

The prime targets for skimming schemes which are hard to monitor and predict such as late fees and parking fees, are

A

Revenue sources

57
Q

Theft of incoming checks usually occurs when a ___ ___ is (are) in charge of opening the mail and recording the receipt of payments.

A

single employee

58
Q

Financial statement fraud is committed by

  • Organized criminals
  • Mid and lower level employees
  • ___ ___
A

Senior management

59
Q

In which approach do fraudsters produce whatever financial statements they wish, perhaps using just a typewriter or a personal computer?

A

Outside accounting system

60
Q

___ ___ is not standard of generally accepted accounting principles.

A

Quality control

61
Q

A typical issue involving material and fraud would be ___.

A

Misappropriations

62
Q

The 10 Generally Accepted Accounting Principles are

  • Monetary Unit Principle
  • Cost Principle
  • Full Disclosure Principle
  • Going Concern Principle
  • Matching Principle
A 
Revenue Recognition Principle
Materiality Principle
Conservatism Principle
Economic Entity Principle
Time Period Principle
63
Q

___ means that the financial figures presented by the company are at least as much as reflected int he statements, if not more.

A

Conservatism

64
Q

“Anticipate possible losses and omit potential profits”, this results in ___ ___.

A

Asymmetrical accounting

65
Q

___ ___ assumes the business will go on indefinitely in the future.

A

Going concern

66
Q

___ ___ ___ is the amount of money that would be realized upon the sale of the asset at some point in the future, less the costs associated with owing, operating and selling it.

A

Net realizable value

67
Q

How many accounts are affected in fraudulent accounting entries and therefore same number of categories on the financial statement?

A

One

68
Q

___ __ ___ revenues involve the recording of sales of goods or services that did not occur.

A

Fictitious or fabricated

69
Q

Revenue is recognized when it is ___ __ ___.

A

Realized and earned

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