Review Questions - Part III

Question 1

Who justifies illegal behavior as simple common practice

Answer 1

EXECUTIVES

Question 2

Residual Risk

Answer 2

remain after controls

Question 3

Inherent Risk

Answer 3

risks before effect of internal controls

Question 4

What kind of due diligence is used for a potential customers who presents a risk, but risk is unlikely to actually manifest

Answer 4

IDENTIFY and VERFIY

Question 5

NOT involved in the risk assessment process (COSO)

Answer 5

Ongoing monitoring of risk management strategy

Question 6

Routine Activities Theory

Answer 6

1. Suitable targets
2. Capable guardians
3. Presence of motivated offenders

Question 7

2020 Report to the Nations, highest median loss

Answer 7

Financial statement fraud

Question 8

Oversight of financial, accounting and audit matters

Answer 8

Audit Committee

Question 9

Transparency

Answer 9

Clarity, accuracy, completeness and timeliness

Question 10

2020 Report of Nations - MOST COMMON occupational fraud

Answer 10

Asset Misappropriation

Question 11

How are surveys captured

Answer 11

Electronic/paper questionnaire

Question 12

Who holds board of directors accountable

Answer 12

shareholders

Question 13

COSO/ACFE - Who has responsibility for managing fraud risk

Answer 13

All levels of organization

Question 14

Describe Punishment

Answer 14

withdrawing positive stimulus and applying negative stimulus

Question 15

“beating the system” committed larger frauds than pay not adeqaute

Answer 15

TRUE

Question 16

Treadway Commission on reduce probability of fraud in financial reports

Answer 16

1. written charter
2. mandatory independent audit committee
3. Adequate audit committee