Practice Exam Questions Flashcards
Traditional Identity theft
fraudster steals an individual’s personal information and pretends to be that individual.
Gains access to account = account takeover
True name fraud
fraudster uses an individual’s personal information to open a NEW account in the individual’s name.
Synthetic identity theft
use of entirely fabricated personal information or a combination of real and fabricated info to create a new identity.
Shimmers vs. Skimmers
Both require a device (Skimmers, wedges, shimmers).
SHimmers - scan micro chips
SKimmers - scan magnetic strips.
Construction Loan Advances - Draw Request
A Draw Request is the documentation substantiating that a developer has incurred the appropriate construction expenses and is now seeking reimbursement or direct payment.
Accompanied by the following documents:
- Paid invoices for raw materials
- Lien releases from each subcontractor
- inspection reports
- Canceled checks from previous draw requests
- Bank reconciliation for construction draw account for previous month.
- Loan balancing form demonstrating that the loan remains in balance.
- Change orders, if applicable.
- Wiring instructions, if applicable
- Proof of developer contribution
A developer’s personal account statements would never be included with a draw request.
Expenses from similar contracts are not included.
Chances for being arrested and prosecuted for check fraud
Are low!
Penalties are mild in most jurisdictions.
Timing differences = Income smoothing
Recording of revenues or expenses in improper periods. Shift revenues or expenses between one period and the next.
Non-repudiation -
a method used to guarantee that the parties involved in an e-commerce transaction cannot repudiate ( deny) participation in that transaction.
Obtained through the use of digital signatures, confirmation services, and timestamps
Additional info security goals are
- confidentiality of data
- integrity of data
- Availability of data
- Authentication
Unbundling
Because health care procedures often have special reimbursement rates for a group of procedures typically performed together, some providers
Simple unbundling occurs when a provider charges a comprehensive code, as well as one or more component codes.
Common methods for concealing liabilities and expenses
- Omitting liabilities and or expenses
- Improperly capitalizing costs rather than expensing then
- Failing to disclose warranty costs and product return liabilities
When an employee skims money by making off-book sales of merchandise,
it is impossible to detect theft by comparing the register to the cash drawer because the sales was not recorded on the register.
Human intelligence
through direct contact with people,
- gathered from subject matter experts and informed individuals
False sale scheme
depends on an accomplice
Business identity theft occurs when
a fraudster impersonates a business to commit fraud
a scavenger or revenge theme
double conning the consumer by using a different company’s name.
quick ratio
(Cash + marketable securities, + receivables) / current liabilities
Information security goals
- confidentiality of data
- integrity of data
- availability of data
- authentication
- non-repudiation
Complementary bidding (protective / shadow / cover bidding)
a common form of collusion between competitors, and it occurs when competitors submit token bids that are not serious attempts to win the contract. token bids give the appearance of genuine bidding, but, by submitting token bids, the conspirators can influence the contract price and who is awarded the contract.
Billing for experimental use of new medical devices that have not yet been approved by the jurisdiction’s health car authority is a type of
fraud.
Upcoding
occurs when a provider bills for a higher level of service than actually rendered.
Lapping customer payments
one of the most common methods used to conceal skimming.
- the crediting of one account through the abstraction of money from another account.
Debt to equity ratio
Dividing total liabilities to total equity.
Developer Overhead is to provide:
Operating Capital
The purpose of developer overhead is to supply the developer with operating capital while the project is under construction. This overhead allocation should not include a profit percentage, as the developer realizes profit upon completion.
Horizontal Analysis vs. Vertical Analysis
Horizontal analysis - a technique for analyzing the percentage change in individual financial statement line items from one accounting period to the next. The first period in the analysis is considered the base period, and the changes in the subsequent period are computed as percentage of the base period.
Vertical analysis is a technique for analyzing the relationships among the items on an income statement, balance sheet, or statement of cash flows during a specific accounting period by expressing components as percentages of a specific base value. within the statement being analyzed.
Security goals for an e-commerce system
Confidentiality, integrity, availability, authentication, and non-repudiation.
A way that dishonest contractors collude to circumvent the competitive bidding process
submit token bids that are not serious attempts to win the contract.
Billing for experiments with new medical devices that have not yet been approved by a jurisdiction’s health care authority is one form of medical fraud
True
Debt-to-equity
dividing total liabilities by total equity.
The purpose of developer overhead is to provide
operating capital
Statement of cash flows
cash flow statement:
- cash from operating activities
- cash from investing activities
- cash from financing activities
Not Electronic funds transfer
credit card.
Principle based vs. rule based
IFRS is considered more of a principle based
GAAP is more rules based
Kickback Scheme
improper, undisclosed payments made to obtain favorable treatment.
An employee receives a payment for directing excess business to a vendor
In such cases, there might not be any overbilling involved, the vendor simply pays the kickbacks to ensure a steady stream of business from the purchasing company.
Administrative security control
Examples of: security policies and awareness training separation of duties Data classification Computer security risk assessments Security audits and tests Incident response plans
consists of management constraints, operational procedures, accountability procedures, and supplemental administrative controls established to provide an acceptable level of protections for computing resources. In addition, administrative controls include procedures established to ensure that all personnel who have access to computing resources have the required authorizations and appropriate security clearances.
Draw request on a construction loan
documentation substantiating that a developer has incurred the appropriate construction expenses and is now seeking reimbursement or direct payment.
Accompanied by the following documents:
- Paid invoices for raw materials
- Lien releases from each subcontractor
- Inspection reports
- Cancelled checks from previous draw requests
- Bank reconciliation for construction draw account for previous month
- Loan balancing from demonstrating that the loan remains in balance
- Change orders, if applicable
- Wiring instructions, if applicable
- Proof of developer contribution, if applicable.
Does NOT include expenses from similar contracts
Phases in the Procurement Process
- the Presolicitation Phase
- Solicitation Phase
- Bid evaluation and award phase
- The post-award and administration phase.
Presolicitation phase (of Procurement Process)
procuring entity identifies its needs,
develops the bid specifications,
determines the method to use for acquiring the goods or services, and
develops the criteria used to award the contract.
Solicitation Phase (of Procurement Process)
i. procuring entity prepares the solicitation document, provides notices of solicitation, and issues the solicitation document.
ii. after the procuring entity issues the solicitation document, the bidders prepare and submit their bids or proposals.
bid evaluation and award phase
i. the procuring employees evaluate the bids or proposals, conduct discussions and negotiations, and give the bidders an opportunity to revise their proposals
ii. procuring employees then select the winning bid or proposal.
post-award and administration phase
i. the contracting parties fulfill their respective duties through the performance of their contractual obligations
ii. Activities that occur during this phrase include contract modifications; review of completed portions and release of monies, and assessment of deliverables for compliance with the contract terms, quality control.
Increasing the inventory record
would only worsen the shrinkage problem.
Instead, a fraudster seeking to conceal shrinkage would falsely decrease the perpetual inventory record to match the lower physical inventory count.
Financial statement fraud
deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional misstatement or omission of amounts or disclosure in the financial statements to deceive financial statement users.
Payroll Schemes
Ghost employees
Falsified hours and salary
Commission schemes
When an employee steals paychecks, the scheme is categorized as check tampering, not generating false payroll disbursements.
False sale scheme
The false sale is one method that depends on an accomplice.
The fake sale is not complicated. The employee-fraudster’s accomplice pretends to buy merchandise, but the employee does not ring up the sale.
Fictitious expense reimbursement scheme
Ex. an employee generates a fake receipt using basic computer software and includes it with an expense report.
Quiet Room - purpose
an area that is acoustically and radio-frequency shielded so that conversations that occur within the room cannot be monitored or heard from outside the room.
Cash Larceny
theft of cash that has already been accounted for in the organization’s books. It is a form of embezzlement limited to operations involving the original receipt of cash.
Skimming
taking cash “off the top” of the daily receipts of a business (or from any cash transaction involving a third interest party)
register records should NOT match up with the cash in the drawer when a cash larceny scheme has occurred.
