Topic 2 Why People Commit Fraud Flashcards
(87 cards)
- When hiring, it is usually difficult to know which employees are capable of committing fraud, especially without performing thorough background checks.
T or F
T
The three elements of the fraud triangle are a perceived pressure, a perceived opportunity, and rationalization.
T or F
T
Management’s example or modelling is of little importance to the control environment.
T or F
F
Good internal controls will often increase opportunities for individuals to commit fraud within an organization.
T or F
F
Effective fraud-fighters usually put most of their time and effort into minimizing the pressures for fraud perpetrators to commit fraud.
T or F
F
The greater the perceived opportunity or more intense the pressure, the less rationalization it takes for someone to commit fraud.
T or F
T
Fraud can be perpetrated to benefit oneself or to benefit one’s organization.
T or F
T
Fraud perpetrators who are prosecuted, incarcerated, or severely punished usually commit fraud again.
F
Many organizations merely dismiss dishonest employees because of the expense and time involved in prosecuting them.
T or F
T
Appropriate hiring will not decrease an organization’s risk of fraud.
T or F
F
An individual who owns his or her own business and is the sole employee needs many internal control activities.
T or F
F
A proper system of authorization will help ensure good internal controls.
T or F
T
Good documents and records are some of the best preventive controls.
T or F
F
Some frauds are allowed to be perpetrated because victims don’t have access to information possessed by the perpetrators.
T or F
T
Power is rarely used to influence another person to participate in an already existing fraud scheme.
F
Fraud perpetrators:
a. Look like other criminals.
b. Have profiles that look like most honest people. c. Are usually very young.
d. Are none of the above.
b)
Which of the following is not one of the three elements of the fraud triangle?
a. Perceived pressure.
b. Perceived opportunity.
c. Rationalization.
d. Intelligence.
d)
Which of the following is a common perceived pressure?
a. The ability to outsmart others.
b. Opportunity to cheat others.
c. A financial need.
d. The ability to “borrow” money by committing fraud.
c)
If pressures and opportunities are high and personal integrity is low, the chance of fraud is:
a. High.
b. Medium.
c. Low.
d. Very low.
a)
Which of the following is probably the least common type of fraud pressure?
a. Vices.
b. Work-related pressures.
c. Financial pressures.
d. Pressure to outsmart peers.
d)
Fraud opportunity involves:
a. Opportunity to conceal fraud.
b. Opportunity to avoid being punished for fraud. c. Opportunity to commit fraud.
d. All of the above.
e. None of the above.
d)
Which of the following is not one of the three elements of the control system of an organization?
a. The control environment.
b. The accounting system.
c. Management.
d. Control activities or procedures.
c)
Which of the following non-control factors provides opportunities for fraud?
a. Inability to judge the quality of performance.
b. Lack of access to, or asymmetrical information.
c. Failure to discipline fraud perpetrators.
d. Lack of an audit trail.
e. All of the above provide opportunities for fraud.
c)
Who generally has the highest risk of becoming a fraud victim?
a. Businessperson.
b. Older, less educated people.
c. College students.
d. None of the above.
b)