EXAM 2 Quizzes

Question 1

A board member of a school voted in favor of the school doing a bond issue to acquire a multi-million-dollar piece of property for a future campus. It was later discovered that the board member’s wife had part-ownership in the property, a fact that the board member never disclosed to the school. What kind of fraud scheme did the board member perpetrate?

A conflict of interest scheme
A false billing scheme
A bid rigging scheme
A duty of care scheme

Answer 1

A conflict of interest scheme

Question 2

Internal auditors for Stuff You Need for Your House, Inc., uncovered what appears to be a kickback scheme amounting to some $30,000 in over-billing by a vendor in the previous 18 months. The company has contacted you to investigate the fraud in order to identify the perpetrator(s). All things being equal, which of the following employees is likely to be involved?

The purchasing manager
A ghost employee
The warehouse manager
The head of accounts receivable

Answer 2

The purchasing manager

Question 3

Payments to offshore bank accounts in cash or by wire; undocumented business entertainment expenses; unusual payments for commissions, loans, temporary employees and directors’ fees are red flags associated with possible:

Shell company schemes
Bid rigging
FCPA violations
Economic extortion

Answer 3

FCPA violations

Question 4

By regularly monitoring the prices paid for good and services as compared to market rates, which type of fraud is an organization trying to detect?

Gouging schemes
Kickback schemes
Commission schemes
Bribery schemes

Answer 4

Kickback schemes

Question 5

Bob was CFO for a chain of Lucky Clucky chicken franchises owned by Tim. By virtue of Bob’s position as CFO, he knew that Tim was planning to open another store in a particular location. Bob hurriedly created a shell company using his wife’s maiden name as the beneficial owner and then purchased the location. The shell company then resold the property to Tim’s company a few weeks later for a greasy little profit of $172,000. What kind of purchasing scheme did Bob commit?

A business diversion scheme.
None. It’s a free market.
A resource diversion scheme.
A turnaround sale

Answer 5

A turnaround sale

Question 6

Not every false billing scheme is categorized as a conflict of interest. For a scheme to be classified as a conflict of interest:

a. The relationship with the vendor company has to be disclosed in advance unless the cost of goods are cheaper.

b. The employee (or a friend or relative of the employee) must have some ownership or employment interest in the vendor that submits the invoice.

c. The employer has an undisclosed conflict of interest in one or more a shell companies.

d. The fraudster’s intent is unlawful in a conflict of interest scheme, whereas in a false billing scheme, they are merely unethical.

Answer 6

b. The employee (or a friend or relative of the employee) must have some ownership or employment interest in the vendor that submits the invoice.

Question 7

_________________ is a process by which several bidders conspire together to split up contracts and ensure that each gets a certain amount of work.

a. Bid phishing
b. Bid pooling
c. Bid peaking
d. Bid conspiring

Answer 7

b. Bid pooling

Question 7

In any antifraud effort, we must always keep in mind that _________________ will deter occupational fraud; we must attack the problem _________________.

a. Nothing can ultimately; from a psychological point of view

b. Fostering trust in employees; with a presumption of goodwill

c. No one factor; on several fronts

d. It is people who will ultimately; through anti-fraud training and internal controls

Answer 7

c. No one factor; on several fronts

Question 8

The majority of conflict of interest schemes fit into one of two categories:

Purchasing schemes and sales schemes
Bribery and illegal gratuities
Conflict of interest and economic extortion
Kickback and “pay it forward” schemes

Answer 8

Purchasing schemes and sales schemes

Question 9

There are at least six positive steps that organizations can employ to increase the perception of detection: employee education, proactive fraud policies, a higher stance, increased use of analytical review, surprise audits where feasible, and _____________.

a. Anti-fraud messaging (such as posters) displayed throughout the organization
b. Adequate reporting programs
c. Foster a climate of trust
d. Prosecute offenders

Answer 9

b. Adequate reporting programs

Question 10

The UK Bribery Act parallels the FCPA in many aspects, however, one key difference is that the former provides no exception for ________________________.

a. Facilitating payments (for things such as obtaining permits)
b. UK citizens acting outside of the UK
c. Bribery of public officials
d. An unduly complex legal or banking structure

Answer 10

a. Facilitating payments (for things such as obtaining permits)

Question 10

The deterrence of occupational fraud and abuse begins in the _______________.

Classroom
Implementation of sound internal controls
Hiring process
The employee’s mind

Answer 10

The employee’s mind

Question 11

_______________ are violations of the rule that a fiduciary, agent, or employee must act in good faith, with _______________, in the best interest of the principal or employer.

Conflict of interest schemes; full disclosure
Purchasing schemes; clear intent
Shell company schemes; full transparency
Ethical lapses; proper duty of care

Answer 11

Conflict of interest schemes; full disclosure

Question 11

Because any examination of a kickback scheme will likely necessitate a review of the corrupt vendor’s books, all contracts with supplies should contain a _____________ clause.

“right to independent counsel”
“right to terminate without cause”
“right to audit”
“right to be reimbursed for kickbacks”

Answer 11

“right to audit”

Question 12

Economic extortion is basically the flip side of a bribery scheme.

a. Instead of an illegal gratuity, the payment comes with an explicit or implied threat to harm the vendor unless they capitulate to demands.

b. Instead of a vendor offering a payment to an employee to influence a decision, the employee demands a payment from a vendor in order to make a decision in that vendor’s favor.

c. Instead of a private company, the payment comes with an explicit or implied threat to harm a government employee unless they capitulate to demands.

d. Instead of cash, “rewards” such as free international vacation may be used.

Answer 12

b. Instead of a vendor offering a payment to an employee to influence a decision, the employee demands a payment from a vendor in order to make a decision in that vendor’s favor.

Question 13

In the ACFE Fraud Tree, corruption schemes are broken down into four classifications. Which of the following is NOT one of the four?

Bribery
Bid rigging
Economic extortion
Conflict of interest

Answer 13

Bid rigging

Question 13

Bribery schemes generally fall into two broad categories:

Governmental acts and commercial decisions
Conflict of interest and self-dealing schemes
Kickbacks and bid-rigging schemes
Bribery and corruption schemes

Answer 13

Kickbacks and bid-rigging schemes

Question 14

Ted is Director of External Affairs for a large pharmaceutical company. Part of his responsibilities include coordinating the company’s national lobbying efforts in order to create more favorable business conditions for the operations of its six regional distribution centers. If Ted decides to create a slush fund with company money in order to provide bribes and gratuities for legislators and others, which way would he most likely use to generate the necessary money for the slush fund?

a. Use cash from falsified travel and entertainment expenses
b. Divert funds from nonaccomplice vendors engaged in overbilling schemes
c. Approve the formation of an offshore shell company through an entity such as Mossack Fonseca
d. Divert funds to lobbyists through invoices for “consulting fees,” “referral fees,” “commissions,” or the like

Answer 14

d. Divert funds to lobbyists through invoices for “consulting fees,” “referral fees,” “commissions,” or the like

Question 14

According to the ACFE’s Report to the Nations, _________________________(i.e., employees, vendors, customers, and anonymous individuals) are the most common means by which occupational fraud is detected.

Surprise audits of
Tips from various sources
Confessions by individuals
Red flags observed among

Answer 14

Tips from various sources

Question 15

Conflicts of interest are essentially different from bribery, illegal gratuities, and economic extortion cases in that a conflict of interest occurs when an employee, manager, or executive, has ________________________________.

a. An undisclosed economic or personal interest in a transaction that adversely affects the organization.
b. A relative with less than two degrees of consanguinity serving on the organization’s board of directors.
c. Materially benefited from a business transaction whose profits should have gone to his/her organization.
d. An officer/director position on the board of another company with which the employing organization does business (e.g., purchasing insurance)

Answer 15

a. An undisclosed economic or personal interest in a transaction that adversely affects the organization.

Question 16

Financial statement fraud schemes are most often perpetrated against _________________ financial statements by management.

a. Publicly traded companies that are required to prepare
b. PCAOB regulations pertaining to
c. GAAP requirements for preparation of
d. Potential users of

Answer 16

d. Potential users of

Question 17

Materiality, according to GAAP, is a _________________ concept.

User-oriented
Transparency
Universal
Regulatory

Answer 17

User-oriented

Question 18

Senior managers and business owners may “cook the books” for any of several reasons: to conceal true business performance, to preserve personal status/control, and to __________________________.

Deceive stockholders
Comply with PCAOB-mandated income targets
Maintain personal income/wealth
Get revenge on the organization (e.g., wages in kind)

Answer 18

Maintain personal income/wealth

Question 18

Inventory valuation, accounts receivable, business combinations, and long-term assets are categories that involve which kind of financial statement fraud?

Improper asset valuation
Revenue recognition
Improper disclosures
Undisclosed related-party transactions

Answer 18

Improper asset valuation

Question 18

Using data spanning 2002-2013 from the ACFE Report to the Nations on Occupational Fraud and Abuse, and made available through the Institute for Fraud Prevention (IFP), the authors examined private company FRF cases in comparison to those at public companies and found several key differences. These included the observation that a stronger antifraud environment in public companies appears to lead public company FRF perpetrators to use ____________ perhaps to make the fraud less obvious, rather than other fraud schemes such as fictitious revenues.

Off balance sheet liabilities
Bribery and illegal gratuities
Timing differences
Classifying expenditures as assets

Answer 18

Timing differences

Question 19

The term financial statement includes almost any financial data presentation prepared according to ____________________ or another __________________.

a. The CEO’s reasonable interpretation; officer within the company
b. Generally accepted accounting principles; comprehensive basis of accounting
c. A professional auditor’s opinion; legitimate source of accounting expertise
d. SEC rulings; regulatory body such as the PCAOB

Answer 19

b. Generally accepted accounting principles; comprehensive basis of accounting

Question 20

There are three main groups of people who commit financial statement fraud. In descending order of likelihood of involvement, they are as follows: Senior management, mid- and lower-level employees, and ___________________.

Organized criminals
Government bureaucrats
Directors and officers of governing boards
Employees with purchasing authority

Answer 20

Organized criminals

Question 21

Which of the following categories of harm resulting from fraudulent financial statements was NOT presented in the text?

a. It jeopardizes the integrity and objectivity of the auditing profession.
b. It makes the capital markets less efficient.
c. It results in huge litigation costs.
d. It increases taxpayer costs for corrections as a result of white collar convictions.

Answer 21

d. It increases taxpayer costs for corrections as a result of white collar convictions.

Question 22

Among the factors associated with financial statement fraud, the most common is pressure on upper management to ______________.

Comply with PCAOB regulations
Show earnings
Manage board relationships
Increase market share

Answer 22

Show earnings

Question 23

_____________________ in the quality and reliability of financial statements, caused by alleged fraudulent activities, is the most damaging and costly effect of financial statement fraud.

a. Increased instances since 2000 of material misrepresentations
b. Worldwide decline in market capitalization can be observed
c. Loss of public confidence
d. Increased regulatory compliance costs

Answer 23

c. Loss of public confidence

Question 24

________________ is defined as the use of deliberate misstatements or omission of amounts or disclosures of financial statements to deceive financial statement users, particularly investors and creditors.

“Earnings management”
Financial statement fraud
Defalcation
Irrelevancy

Answer 24

Financial statement fraud

Question 25

If a company changes the way it keeps its books from one year to the next, and if these changes have a material impact on the financial statements, they must be disclosed in a note. Fraud occurs when ___________ is intentionally avoided to show false profits.

Consistency
Net realizable value
Relevance
Clarity

Answer 25

Consistency

Question 26

There are three general ways in which fraudulent financial statements can be generated: playing the accounting system, beating the accounting system, and ____________________.

a. Inverting the accounting system (i.e., intentionally reversing debits and credits)
b. Claiming to have no knowledge of fraudulent transactions in the accounting system
c. Coercing employees who control the accounting system
d. Going outside the accounting system

Answer 26

d. Going outside the accounting system

Question 27

The premise of the ____________________ is that the activity of a business enterprise should be kept separate and distinct from its owners and other business entities.

Monetary unit
Going concern
Economic entity assumption
Periodicity principle

Answer 27

Economic entity assumption

Question 27

Organizational avoidance of setting unachievable or unreasonable financial goals is an example of:

Reducing the pressure to commit financial statement fraud

Reducing the opportunity to commit financial statement fraud

Reducing the grounds for rationalizing financial statement fraud

Reducing the incentives for reaching performance targets

Answer 27

Reducing the pressure to commit financial statement fraud

Question 28

Financial statements are the responsibility of company ____________.
Bookkeepers
Shareholders
Management
External auditors

Answer 28

Management

Question 28

Many major financial frauds have resulted from the purposeful omission of _____________ in the financial statements.

Periodicity
Note disclosures
Conflicts of interest
Net realizable value (NRV) of assets

Answer 28

Note disclosures

Question 29

Liability omissions, subsequent events, management fraud, related-party transactions, and accounting changes are all associated with which type of financial statement fraud?

Timing differences
Revenue recognition
Improper disclosures
Channel stuffing

Answer 29

Improper disclosures

Question 29

Generally speaking, revenue is recognized when it is realized or realizable and _____________.

Recorded
Received
Invoiced
Earned

Answer 29

Earned

Question 30

Stewart was an iconic CEO with a $32-million-a-year salary until he was convicted of embezzlement. An internal auditor was the first to notice a red flag on a balance sheet ratio. What did she notice?

A decrease in the company’s debt to equity ratio
A decrease in the company’s current ratio
An increase in the company’s quick ratio
An increase in the company’s profit margin ratio

Answer 30

A decrease in the company’s current ratio

Question 31

The starting point for the antifraud professional or forensic accountant is an attitude of ______________________.

Professional skepticism
Unbiased professionalism
Professional pessimism
Professional rigor

Answer 31

Professional skepticism

Question 31

The 2016 ACFE Report to the Nations found that ___________ of existing controls is the second most frequently observed internal control weakness that contributed to fraud; the lack of internal controls was the only weakness more frequently cited by the ACFE’s survey respondents.

A lack of clarity
A lack of awareness
Overly complex design
Override

Answer 31

Override

Question 32

The board’s audit committee is __________________ with regard to management override and high-level management collusion.

a. A persistent relic of another era in management
b. An unnecessary layer if an internal auditor (or team) exists
c. An optional approach to board oversight but not recommended for publicly traded companies
d. An integral internal control mechanism

Answer 32

d. An integral internal control mechanism

Question 33

Data such as laundromat electricity usage and cycle time, beer purchase quantities, and travel dates are examples of:

Accounting anomalies
Nonfinancial numerical performance data
Red flags that have little to no potential value in verifying or disproving fraud
Tend to be “corrupted” sources of data

Answer 33

Nonfinancial numerical performance data

Question 34

Fraud detection techniques require that fraud and forensic accounting professionals pay particular attention to the possibility of ________________ because it suggests deception.

Concealment
Collusion
Override of internal controls
Conversion

Answer 34

Concealment

Question 35

In most cases, asset misappropriation, corruption, and financial statement fraud last about ____________ from inception to conclusion.

24 months
6 months
2.4 months
16 months

Answer 35

24 months

Question 36

_______________ must take the lead in establishing, implementing, and maintaining a formal fraud risk management program.

Corporate shareholders
Board and management
Regulatory agencies such as the PCAOB and SEC
Internal auditors

Answer 36

Board and management

Question 37

Because prevention through segregation of duties, approvals, and authorizations is not possible in a collusive environment, the principal internal control procedures will be centered on _____________.

Authority
Mitigation
Detection
Deterrence

Answer 37

Detection

Question 37

The most challenging issue regarding fraud detection in a digital environment is the potential for:

a. The inherent susceptibility of digitally stored data to be fraudulently altered without detection.
b. Historical transaction data to be lost over time due to the high costs of digital storage.
c. An over-whelming number of fraud symptoms (i.e., red flags).
d. Hackers and other unauthorized users gaining access to proprietary information

Answer 37

c. An over-whelming number of fraud symptoms (i.e., red flags).

Question 38

The first step to detecting fraud is to build an understanding of the organization and the environment in which it operates. The second step is to ______________________.

a. Develop an understanding of the control environment—the environment as opposed to the controls themselves.

b. Develop an audit plan that includes discussions with senior management about potential fraud risks

c. Develop a network of insiders who may have knowledge of actual fraud

d. Remind your team of the importance of professional skepticism

Answer 38

a. Develop an understanding of the control environment—the environment as opposed to the controls themselves.

Question 39

The materiality amount—once established—is _______________ for the duration of the audit engagement.

Essentially a footnote
Not set in stone
Fixed and cannot be adjusted
Determined by management

Answer 39

Not set in stone

Question 40

Management has some latitude to manage earnings as long as the choices are considered ____________, however, any sign of deliberate efforts to do so should be considered a red flag by auditors, because it can be fraud, whether or not material.

Reasonable by investors
Necessary to achieve performance bonuses
GAAP-compliant
Board approved

Answer 40

GAAP-compliant

Question 41

Irregularities such as missing documents, excessive voids or credit memos, excessive write-offs, duplicate payments, second endorsement on checks, and questionable handwriting are all examples of:

Accounting anomalies
Analytical anomalies
Behavioral red flags
Internal control irregularities and weaknesses

Answer 41

Accounting anomalies

Question 42

The targeted fraud risk assessment approach assumes that there should be a direct relationship between the ________________ and the _________________________.

a. Specific industry involved; risk levels typically associated with that industry

b. Accounts receivable department; accounts payable department

c. Level of risk associated with a material weakness in the company’s controls; amount of attention devoted to that area during an audit

d. Organization’s tolerance for risk; implementation of appropriate internal controls

Answer 42

c. Level of risk associated with a material weakness in the company’s controls; amount of attention devoted to that area during an audit v

Question 43

An overview of the fraud risk assessment process includes the following components:

a. Propose the scope of the audit, execute the scope, report the findings to the board, and reply to management concerns.

b. Money, Ideology, Coercion, and/or Ego/Entitlement (MICE).

c. Act, concealment, and conversion.

d. Evaluate the fraud risk factors, identify possible fraud schemes and scenarios, prioritize individual fraud risks, evaluate mitigating controls

Answer 43

d. Evaluate the fraud risk factors, identify possible fraud schemes and scenarios, prioritize individual fraud risks, evaluate mitigating controls

Question 43

Generally, enhanced skepticism has three defining elements. First it includes the recognition that fraud may be present. Second, professional skepticism is exemplified by a professional’s attitude, an attitude that includes a questioning mind and a critical assessment of evidence. Third, professional skepticism asks professionals to make a commitment to __________________________.

a. Doing whatever it takes to convict the guilty

b. Persuasive evidence to determine whether or not fraud is present

c. Never giving up when it comes to identifying and locating more evidence

d. Extending a presumption of goodwill unless or until evidence suggests otherwise

Answer 43

b. Persuasive evidence to determine whether or not fraud is present

Question 44

Most red flags are:

a. Indicators of fraud if one knows how and where to look.

b. Typically, indicative of fraud if a targeted risk assessment was not completed.

c. Not indicators of fraud but are a function of the dynamic environment in which organizations operate.

d. Indicators of unskilled fraudsters who don’t have sufficient knowledge to conceal their defalcations.v

Answer 44

c. Not indicators of fraud but are a function of the dynamic environment in which organizations operate.

Question 45

The primary deterrent effect of an internal audit group is related to:

a. The skillsets of the individual(s) involved.

b. Its ability to parse large volumes of data.

c. The increased perception that fraud perpetrators will be detected.

d. Assisting senior management in establishing the “tone at the top.”

Answer 45

c. The increased perception that fraud perpetrators will be detected.

Question 46

Residual fraud risk includes those _______________ that are not adequately mitigated by control activities, and, as such, requires a fraud audit response.

Fraud schemes
Personnel
Industry norms
Company specific characteristics v

Answer 46

Fraud schemes

Question 47

Generally, three procedures are effective in identifying breakdowns in internal controls due to override and collusion: journal entries recording in the books and records, as well as other adjustments to financial information should be examined for proper back-up document; significant accounting estimates needs to be reviewed; and ___________________________.

a. Care should be taken by the board to ensure that the external auditor is indeed, independent in fact, and in appearance.

b. A properly functioning board-operated audit committee which has the ability to independently investigate anomalies should be established.

c. A robust whistleblower mechanism should be implemented and its existence widely published throughout the organization.

d. Unusual “one-time” transactions should be scrutinized to ensure they have an appropriate underlying business rationale.

Answer 47

d. Unusual “one-time” transactions should be scrutinized to ensure they have an appropriate underlying business rationale.

Question 47

In a kickback scheme, the funds come directly from:

The victim company

A nonaccomplice vendor

An accomplice vendor

Employees with purchasing authority

Answer 47

The victim company

Question 48

Illegal gratuities are similar to bribery schemes except there is not necessarily:

A code of ethics violation for most companies and government employees

Economic extortion

Intent to influence a particular business decision

A cash payment

Answer 48

Intent to influence a particular business decision

Question 49

The majority of conflict schemes are ___________ schemes, and the most common of these is the _____________ scheme.

Billing; extortion

Undisclosed; purchasing

Purchasing; billing

Sales; gratuities

Answer 49

Purchasing; billing

Question 50

Shell company schemes are classified as:
Group of answer choices

Economic extortion

Undisclosed relationship schemes

False billing schemes

Conflict of interest schemes

Answer 50

False billing schemes

Question 50

To detect conflicts of interest, organizations should concentrate on establishing ________________ to receive tips and complaints.

A whistle-blower protections policy

Robust internal controls

An anonymous reporting mechanism

A segregation of duties policy

Answer 50

An anonymous reporting mechanism

Question 51

A short rule of thumb that can be used to distinguish between overbilling schemes that are classified as asset misappropriations and those that are conflicts of interest: if the bill originates from a ______________ in which the fraudster has an economic or personal interest, and if the fraudster’s interest in the company is undisclosed to the victim company, then the scheme is a conflict of interest.

Real company

Shell company

Offshore bank

Nonaccomplice vendor

Answer 51

real company

Question 52

Offering, giving, receiving, or soliciting anything of value to influence an official act is the definition of:

Bribery

Economic extortion

Bid rigging

Illegal gratuity

Answer 52

Bribery

Question 52

____________ are part of the day-to-day operations of most organizations and are often observed by auditors.

Earnings management

Transaction adjustments

Risks

Anomalies

Answer 52

Anomalies

Question 53

In an electronic environment that captures a huge amount of transactions annually, many transactions and data relationship anomalies appear to be a potential fraud or error. To utilize the computer environment effectively, _________________ must be completed.

The targeted fraud risk assessment process

A hypothesis/null hypothesis matrix

CAATT training by the auditor or examiner

A Benford analysis on all journal entries

Answer 53

The targeted fraud risk assessment process

Question 54

When conducting an audit, the auditor has a responsibility to design audit tests to address the risk of management override of internal controls. _____________ can be discerned by looking for evidence of concealment such as missing documents, altered documents, nonreconcilable items, misinformation obtained during management inquiries, and other indicators of concealment.

Errors

Scope

Intent

Red flags

Answer 54

Intent

Question 54

There are two major approaches to fraud detection:

Through tips (allegations) and the preponderance of evidence

Through external audits and internal audits

Through the identification of red flags and through a targeted risk assessment

Through the use of covert and overt surveillance (both physical and digital)

Answer 54

Through the identification of red flags and through a targeted risk assessment

Question 55

The perception of the public—particularly with regard to asset misappropriation, corruption, and misstated financial statements—is that independent auditors are:

Largely corrupt and untrustworthy themselves

Responsible for fraud detection

Not generally trained in the specific techniques of fraud examination

Antiquated in the age of big data and artificial intelligence (AI)

Answer 55

Responsible for fraud detection

Question 56

_______________ is a relative concept. A misstated amount that would be immaterial to a large company could be large enough to wipe out the net worth of most small companies.

Materiality

Truth

Fraud

An external audit

Answer 56

Materiality

Question 57

The risk of management override and collusion are _________ residual fraud risks and require a specific audit response, if detection activities do not exist.

Occasionally

Always

Rarely

Never

Answer 57

Occasionally

Question 58

____________ involves deliberate actions by management to meet specific earnings objectives, generally for private gain.

“Earnings management”

“Willful non-transparency”

“Vertical and horizontal ratios”

“Ego/Entitlement”

Answer 58

“Earnings management”

Question 59

The text outlines a ten-step approach to implementing a targeted fraud risk assessment. Which of the following is NOT one of those steps.

Identify the “process owner” for each of the identified significant processes.

Identify the parties who have the ability to commit the potential fraud.

Identify specific vendors that have a reputation for fraud within the industry.

Identify, understand, and evaluate the company’s operating environment and the pressures that exist.

Answer 59

Identify specific vendors that have a reputation for fraud within the industry.

Question 60

A major difference between auditors and fraud examiners is that most auditors __________________. Fraud examiners and forensic accountants who detect fraud go beyond this. They determine whether __________________, whether expenditures make sense, and whether all aspects of the documentation are in order.
Group of answer choices

Are not trained in detecting fraud; red flags exist

Merely match documents to numbers to see whether support exists and is adequate; the documents are real or fraudulent

Have at least a 5% threshold for materiality; fraud at any threshold exists

Don’t have the interview skills to assess fraud; people make inconsistent statements

Answer 60

Merely match documents to numbers to see whether support exists and is adequate; the documents are real or fraudulent