Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Fraud Examination > Chapter 1: The Nature of Fraud > Flashcards

Chapter 1: The Nature of Fraud Flashcards

1
Q

T/F - All Frauds that are detected by organizations are made public

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

T/F - Perpetrators use trickery, confidence, and deception to commit fraud.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

T/F - One of the most common responses to fraud is disbelief by those around the fraud.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

T/F - Manufacturing companies with a profit margin of 10 percent must usually generate about 10 times as much revenue as the dollar amount o the fraud in order to restore net income to its pre-fraud level.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

T/F - Fraud involves using physical force to take something from someone

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

T/F - Identity theft is an example of employee embezzlement

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

T/F - When perpetrators are criminally convicted of fraud, they often serve jail sentences and/or pay fines

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

T/F - Management fraud is deception perpetrated by an organization’s top management

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

T/F - A Ponzi scheme is considered to be a type of investment scam

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

T/F - Most people agree that fraud-related careers will be in demand in the future

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

T/F - In civil cases, fraud experts are rarely used as expert witnesses.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

T/F - Many companies try to hide their losses from fraud rather than make them public

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

T/F - The only group/business that must report employee embezzlement is the federal government

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

T/F - Advances in technology have had no effect either on the size or frequency of fraud or on the detection or investigation of fraud.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

T/F - Fraud losses generally reduce a firm’s income on a dollar-for-dollar basis

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

T/F - The single most critical element for a fraud to be successful is opportunity

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

T/F - Fraud perpetrators are often those who are least suspected and most trusted

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

T/F - Unintentional errors in financial statements are a form of fraud

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

T/F - Occupational fraud is fraud committed on behalf of an organization

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

T/F - Companies that commit financial statement fraud are often experiences net losses or have profits that are significantly lower than expectations

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

T/F - Indirect fraud occurs when a company’s assets go directly into the perpetrator’s pockets without the involvement of third parties

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

T/F - In vendor fraud, customers don’t pay for goods purchased

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

T/F - A negative outcome in a civil lawsuit usually results in jail time for the perpetrator

A

False

24
Q

T/F - When fraud is committed, criminal prosecution usually proceeds before civil litigation

A

True

25
Q

T/F - A fraud may be perpetrated through an unintentional mistake

A

False

26
Q

T/F - It is most often people who are not trusted that commit fraud

A

False

27
Q

T/F - Management fraud is when managers intentionally deceive their employees about the potential of raises, vacations, and other perks

A

False

28
Q

T/F - Despite intense measures meant to impede it, fraud appears to be one of the fastest growing crimes in the United States

A

True

29
Q

T/F - The ACFE is a nonprofit organization dedicated to the prevention and detection of fraud throughout the world

A

True

30
Q

T/F - There is no difference between a Certified Fraud Examiner (CFE) and a Certified Public Accountant (CPA)

A

False

31
Q

Why does fraud seem to be increasing at such an alarming rate?

a. Computers, the Internet, and technology make fraud easier to commit.
b. Most frauds today are detected, whereas in the past many were not.
c. A new law required that fraud be reported within 24 hours.
d. People understand the consequences of fraud to organizations.

A

a. Computers, the Internet, and technology make fraud easier to commit.

32
Q

Which of the following is NOT an important element of fraud?

a. Confidence.
b. Deception.
c. Trickery.
d. Intelligence.

A

d. Intelligence.

33
Q

Fraud is considered to be:

a. A serious problem that continues to grow.
b. A problem that affects very few individuals.
c. A mild problem that most businesses need not worry about.
d. A problem under control.

A

a. A serious problem that continues to grow.

34
Q

People who commit fraud are usually:

a. New employees.
b. Not well groomed and have long hair and tattoos.
c. People with strong personalities.
d. Trusted individuals.

A

d. Trusted individuals.

35
Q

“The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” is the definition of which of the following types of fraud?

a. Employee embezzlement or occupational fraud
b. Investment scams.
c. Management fraud.
d. Vendor fraud.

A

a. Employee embezzlement or occupational fraud

36
Q

Corporate employee fraud-fighters:

a. Work as postal inspectors and law enforcement officials.
b. Prevent, detect, and investigate fraud within a company.
c. Are lawyers who defend and/or prosecute
d. None of the above

A

b. Prevent, detect, and investigate fraud within a company.

37
Q

Investment scams most often include:

a. An action by top management against employees
b. Worthless investments or assets sold to unsuspecting investors.
c. An overcharge for purchased goods.
d. Nonpayment of invoices for goods purchased by customers.

A

b. Worthless investments or assets sold to unsuspecting investors.

38
Q

Which of the following is NOT true of civil litigation?

a. It usually begins when one party files a complaint.
b. The purpose is to compensate for harm done to another
c. It must be heard by 12 jurors.
d. Only “the preponderance of the evidence” is needed for plaintiff to be successful.

A

c. It must be heard by 12 jurors.

39
Q

Future careers in fraud will most likely be:

a. In low demand
b. In moderate demand
c. Low paying.
d. In high demand and financially rewarding.

A

d. In high demand and financially rewarding.

40
Q

Studying fraud will help you:

a. Learn evidence-gathering skills.
b. Avoid high-risk and fraudulent activities.
c. Learn valuable interviewing skills.
d. All of the above.

A

d. All of the above.

41
Q

Which of the following is THE LEAST reliable resource for fraud statistics?

a. FBI agencies.
b. Health agencies.
c. Insurance organizations.
d. Fraud perpetrators.

A

d. Fraud perpetrators.

42
Q

Which of the following statements is true?

a. On a per-incident basis, bank robberies are more costly than frauds.
b. Fraud is often labeled the fastest growing type of crime.
c. FBI agencies usually investigate frauds that occur within organizations.
d. None of the above statements are true.

A

b. Fraud is often labeled the fastest growing type of crime.

43
Q

Which of the following is NOT an element of fraud?

a. False representation.
b. Accidental behavior.
c. Damage to a victim.
d. Intentional or reckless behavior.

A

b. Accidental behavior.

44
Q

What is the best way to minimize fraud expense within an organization?

a. Effective early detection of fraud.
b. Effective investigation of fraudulent behavior.
c. Effective prevention of fraud.
d. Effective research of fraud.

A

c. Effective prevention of fraud.

45
Q

What is the most important element in successful fraud schemes?

a. Promised benefits.
b. Confidence in the perpetrator.
c. Profitable activities.
d. Complexity.

A

b. Confidence in the perpetrator.

46
Q

Which of the following characters is least likely to be involved in fraud?

a. A middle-aged person with a middle management position.
b. A long-haired teenager wearing leather pants.
c. A recent college graduate.
d. A senior executive who has significant stock options

A

b. A long-haired teenager wearing leather pants.

47
Q

Which of the following is NOT a common type of fraud?

a. Direct employee embezzlement.
b. Employee bribes.
c. Executives embezzling from petty cash.
d. Investment scams.

A

c. Executives embezzling from petty cash.

48
Q

Which of the following is NOT a form of vendor fraud?

a. Overcharging for purchased goods.
b. Shipment of inferior goods.
c. Non shipment of goods even through payment has been made.
d. Not paying for goods purchased.

A

d. Not paying for goods purchased.

49
Q

Civil law performs which of the following functions?

a. Remedy for violation of private rights.
b. Remedy for violations against society as a whole.
c. Punishment for guilt “beyond reasonable doubt”
d. Monetary fines for federal damages.

A

a. Remedy for violation of private rights.

50
Q

Fraud fighting can include which of the following type(s) of careers?

a. Professors.
b. Lawyers.
c. CPA Firms.
d. All of the above

A

d. All of the above

51
Q

Which of the following is NOT an example of employee embezzlement?

a. Land conservation employees stealing equipment.
b. Cashiers stealing money from the cash register.
c. Angry employees vandalizing the building with spray paint.
d. Salespeople overcharging for products and pocketing excess cash.

A

c. Angry employees vandalizing the building with spray paint.

52
Q

Which of the following is NOT an example of vendor fraud?

a. A vendor overcharges a contracting job that it completed on time.
b. A vendor bills for services not performed.
c. A vendor bills for goods not provided.
d. A vendor has much higher prices than its competitors.

A

d. A vendor has much higher prices than its competitors.

53
Q

“Intentional manipulation of financial statements” describes which kind of fraud?

a. Management fraud.
b. Criminal fraud.
c. Stock market fraud.
d. Bookkeeping fraud.

A

a. Management fraud.

54
Q

Which of the following is required to become a CFE?

a. An individual must commit to abide by a strict code of professional conduct and ethics.
b. Be an associate member, in good standing, of the ACFE.
c. Be of high moral character.
d. All of the above are required to become a CFE.

A

d. All of the above are required to become a CFE.

55
Q

Which of the following is NOT true regarding the ACFE?

a. It s the largest anti-fraud organization in the world.
b. It has roughly 12,000 members throughout the world.
c. The entire organization is dedicated to anti-fraud-fighting efforts.
d. It is the premier provider of anti-fraud training.

A

b. It has roughly 12,000 members throughout the world.

Fraud Examination (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions