CFE

Question 1

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

Answer 1

Rationalization

Question 2

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

Answer 2

Absconders

Question 3

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

Answer 3

False

Question 4

White collar crime is also known as ___ ___?

Answer 4

Occupational fraud

Question 5

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

Answer 5

Employee deviance

Question 6

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.

Answer 6

61 percent

39 percent

Question 7

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

Answer 7

Trend analysis

Question 8

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

Answer 8

Debit covenants

Question 9

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

Answer 9

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

Question 10

What are the four classifications for corruption?

• Bribery
• Economic extortion

Answer 10

Illegal gratuities

Conflicts of Interest

Question 11

The most common method of detection in corruption cases is?

Answer 11

Tips

Question 12

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

Answer 12

Kickbacks

Question 13

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

Answer 13

False

Question 14

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?
___ ___

Answer 14

Competitive bidding

Question 15

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

Answer 15

True

Question 16

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

Answer 16

A need recognition scheme

Question 17

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?

Answer 17

Solicitation

Question 18

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

Answer 18

fictitious suppliers

Question 19

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

Answer 19

Sealed bids

Question 20

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

Answer 20

Bid-splitting

Question 21

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

Answer 21

Bid splitting

Question 22

Collusion or bid-rigging between bidders is called?

Answer 22

Contract acceptance

Question 23

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

Answer 23

Conflict of interest

Question 24

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

Answer 24

False

Question 25

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 ___ ___ __ ___.

Answer 25

Turnaround sale or flip

Question 26

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

Answer 26

Disclosure

Question 27

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?

Answer 27

Concealed check scheme

Question 28

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

Answer 28

Register disbursement scheme

Question 29

The most common method for billing scheme is ___?

Answer 29

Tips

Question 30

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

Answer 30

Invoicing via accomplice companies

Question 31

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 ___.

Answer 31

Purchase order | Delivered

Question 32

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

Answer 32

Shell company

Question 33

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

Answer 33

False

Question 34

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

Answer 34

False

Question 35

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.

Answer 35

Fiduciary Capacity

Question 36

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 - ___ __ ___ __ ___ ___.

Answer 36

Creates or reinforces a false impression

Question 37

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

Answer 37

Larceny by fraud

Question 38

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

Answer 38

Assets

Question 39

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

Answer 39

Perceived and or Appraised

Question 40

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

Answer 40

Supplies

Question 41

___ are the amounts which are owed to other entities.

Answer 41

Liabilities

Question 42

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

Answer 42

False

Question 43

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

Answer 43

Expense

Question 44

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

Answer 44

Accrual basis accounting

Question 45

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 ___.

Answer 45

Accruals

Question 46

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

Answer 46

Journal entries

Question 47

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

Answer 47

Debit

Question 48

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

Answer 48

Credit

Question 49

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

Answer 49

A written order exists but contains a right of return.

Question 50

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

Answer 50

Journal entries and transactions

Question 51

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

Answer 51

Out of balance

Question 52

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

Answer 52

True

Question 53

According to fraud tree, cash has the 3 following schemes. - Fraudulent disbursements - ___ ___ - ___

Answer 53

Skimming | Cash larceny

Question 54

Skimming cases are more likely to be detected by ___.

Answer 54

Accidents

Question 55

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 ___.

Answer 55

services | sale

Question 56

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

Answer 56

Revenue sources

Question 57

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

Answer 57

single employee

Question 58

Financial statement fraud is committed by - Organized criminals - Mid and lower level employees - ___ ___

Answer 58

Senior management

Question 59

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

Answer 59

Outside accounting system

Question 60

___ ___ is not standard of generally accepted accounting principles.

Answer 60

Quality control

Question 61

A typical issue involving material and fraud would be ___.

Answer 61

Misappropriations

Question 62

The 10 Generally Accepted Accounting Principles are - Monetary Unit Principle - Cost Principle - Full Disclosure Principle - Going Concern Principle - Matching Principle

Answer 62

``` Revenue Recognition Principle Materiality Principle Conservatism Principle Economic Entity Principle Time Period Principle ```

Question 63

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

Answer 63

Conservatism

Question 64

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

Answer 64

Asymmetrical accounting

Question 65

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

Answer 65

Going concern

Question 66

___ ___ ___ 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.

Answer 66

Net realizable value

Question 67

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

Answer 67

One

Question 68

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

Answer 68

Fictitious or fabricated

Question 69

Revenue is recognized when it is ___ __ ___.

Answer 69

Realized and earned