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Fraud Exam > Quiz1_Review > Flashcards

Quiz1_Review Flashcards

1
Q

What kind of checks did Alan Salah deposit…

A

counterfeit cashier’s checks

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2
Q

How do we know the checks were counterfeit…?

A

the check number had been altered

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3
Q

Dr. Gallentine was committing fraud by altering this…

A

patient documentation

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4
Q

What kind of statements were obtained from the witnesses in the Dr. Gallentine case…?

A

signed, sworn statements

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5
Q

What was one of the lessons learned from “Down The Rabbit Hole….?

A

don’t be afraid to innovate

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6
Q

What is a Ponzi Scheme….?

A

a scheme of fraud where new investors pay older investors or the fraudster but there is no real investment

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7
Q

One of the first mentions of a Ponzi scheme in history was…!

A

Charles Dicken’s books or Sarah Howe

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8
Q

In terms of Ponzi schemes – if it looks too good to be true…

A

then it is too good to be true

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9
Q

What is one of the four good sources of fraud information…

A

government sources, researches, insurance companies, victims

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10
Q

A Ponzi scheme is in what classification of fraud…?

A

investment fraud

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11
Q

What is the “theft diagram”?

A

theft act, conversion, concealment

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12
Q

What was the main provision of the SOX Act…

A

whistle-blower programs

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13
Q

What theory says that people are less likely to choose crime if they had strong social bonds, and that people tend to unavoidably learn things they see or experience in a “hands on” way…

A

Social Learning Theory

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14
Q

What does the “slippery slope effect” say…

A

individuals more readily justify small indiscretions which tends to justify bigger ones

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15
Q

What was the purpose of the story of the tree….

A

example of creating a positive work environment

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16
Q

What is one good way to prevent crime…

A

establishing good internal control

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17
Q

What should the tone be set to prevent fraud in an organization…

A

the tone at the top

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18
Q

What is a system to help employees with life issues that might impact their performance…

A

Employee Assistance Program

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19
Q

Organizations should develop what kind of approach to fraud prevention…

A

comprehensive

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20
Q

In terms of deterring fraud in a company, what expectation must be created…

A

an expectation of punishment

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21
Q

This theory indicates that criminals learn of possibilities of crime, or seeks them out, as part of their daily actions…

A

Routine Activity Theory

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22
Q

Routine Activity Theory (Elements of a crime)

A
  1. A motivated offender
  2. A suitable victim
  3. The absence of a capable guardian…
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23
Q

What size of a company is fraud most prevalent in…

A

small to middle

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24
Q

What is a purpose of a civil action against an individual…?”

A

obtain a financial recovery

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25
Q

What was the origin of the “Pygmalion Effect”…

A

a sculptor made a statue so beautiful he fell in love with i

26
Q

What type of font is required…

A

Times New Roman

27
Q

What is the line spacing in A.P.A. style?…

A

double-spacing

28
Q

How many spaces is every line in a reference indented after the first line…?

A

five spaces

29
Q

What must be contained in the title block of the cover page…?

A

title of paper, name of author, and “area of study

30
Q

How is the “Running Head” supposed to look like…?

A

Running Head: TITLE OF YOUR PAPER

31
Q

Fraud involving misstatements in the balance sheet, income statement, and the statement of cash flows is called…?

A

financial statement fraud

32
Q

The type of power wherein the fraudster influences another person because of expertise or knowledge…?

A

expert power

33
Q

Fraud as it pertains to vendor fraud involving collusion is called…?

A

indirect fraud

34
Q

Ways that perpetrators of fraud spend or utilize stolen assets are…?

A

conversion

35
Q

In a civil case the prosecution must prove the case beyond a…?

A

preponderance of the evidence

36
Q

What is the total percentage of organizational assets lost to fraud?

A

5%

37
Q

Biological Factors

A

Any biological condition or situation which diverts an individual from developing from a societal norm. (MENTAL ILLNESS)

38
Q

Situational Factors

A

Any current condition or situation which diverts and individual from developing from a societal norm.

39
Q

Situational Factors

A

family and/or friends/associates

poverty, education, parenting practices, and family structure

poor communication skills and weak family bonds

Bankruptcy, desire for profitability, desire to demonstrate a company’s turnaround

40
Q

Social Exchange Theory

A

Cost and benefit analysis between two parties to determine risks and benefits

41
Q

Routine activity theory (3 parts of it)

A

absence of guardian, motivated offender, suitable victim

42
Q

Sigmund Freud

A

“The Father of Psychoanalysis”

43
Q

Cesare Lombroso

A

“Father of Criminology”

44
Q

Travis Hirschi

A

“The Father of the Social Control Theory”

45
Q

The fraud triangle

A

pressure, opportunity, rationalization

46
Q

Seven Specific Parts of Fraud

A 
a representation,
about a material point,
which is false,
and intentionally or recklessly so,
which is believed,
and acted upon by the victim,
to the victim’s damage
47
Q

Two types of entities that commit fraud

A

Committed against an organization or on behalf of an organization

Committed against and individual or by individual(s)

48
Q

Fraud classification according to victims:

A

Company or Organization as victim

  • Employee embezzlement
  • Vendor fraud
  • Customer fraud

Shareholders or debt-holders as victims
-Management fraud

Unwary individuals as victims
-Investments and other consumer fraud

49
Q

6 Main types of fraud

A

Occupational Fraud

Employee Embezzlement

Vendor Fraud

Customer Fraud

Management Fraud

Investments and Other Consumer Fraud

50
Q

Four main pressures to commit fraud

A

Financial pressures
Vices
Work-related pressures
Other pressures

51
Q

Six major factors that increase fraud opportunity

A
  1. Lack of controls
  2. Inability to judge performance quality
  3. Failure to discipline fraudsters
  4. Lack of access to information
  5. Ignorance, apathy and incapacity
  6. Lack of audit trail
52
Q

Controls to Prevent / Detect Fraud (CONTROL ENVIRONMENT)

A

1) Management’s Role and Example
2) Management Communication
3) Appropriate Hiring
4) Clear Organizational Structure
5) Effective Internal Audit Department

53
Q

Controls to Prevent / Detect Fraud (ACCOUNTING SYSTEM)

A
  1. Valid
  2. Properly authorized
  3. Complete
  4. Properly classified
  5. Reported in the proper period
  6. Properly valued
  7. Summarized correctly
54
Q

Controls to Prevent / Detect Fraud (CONTROL ACTIVITIES)

A
  1. Segregation of duties, or dual custody
  2. System of authorizations
  3. Independent checks
  4. Physical safeguards
  5. Documentation and records
55
Q

How Organizations Fight Fraud

A
  1. prevention
  2. etection
  3. investigation
  4. Follow-up legal action
56
Q

Creating a Positive Work Environment:

Fraud occurs less frequently when employees have

A

1) Positive feelings about an organization

2) A sense of ownership in the organization

57
Q

Create a culture of honesty, openness, and assistance by…

A
  1. Hiring honest people and providing fraud awareness training
  2. Creating a positive work environment
  3. Providing an employee assistance program (EAP) that helps employees deal with personal pressures
58
Q

How to create a positive work environment?

A
  1. Setting expectations about honesty
  2. Having positive personnel and operating procedures.
  3. Having open-door or easy access policies
59
Q

Five ways to eliminate fraud opportunities:

A
  1. Have good internal controls
  2. Discourage collusion
  3. Monitor employees and provide a whistle-blowing system
  4. Create an expectation of punishment
  5. Conduct proactive auditing
60
Q

Good fraud auditing involves four steps:

A
  1. Identify fraud risk exposures
  2. Identify the fraud symptoms of each exposure
  3. Build audit programs to proactively look for symptoms and exposures
  4. Investigate fraud symptoms identified

Fraud Exam (1 decks)

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