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Fraud > White Clllar Crime > Flashcards

White Clllar Crime Flashcards

1
Q

According to a study conducted by Dr. Steve Albrecht, occupational crime perpetrators who were interested primarily in “beating the system” committed larger frauds than those who believed their pay was not adequate.

A. True
B. False

A

True

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2
Q

According to Occupational Fraud 2022: A Report to the Nations, which of the three major categories of occupational fraud is the MOST COMMON?

A. Corruption
B. Asset misappropriation
C. Identity theft
D. Financial statement fraud

A

B. Asset misappropriation

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3
Q

Through his research, Dr. Steve Albrecht found which of the following personal characteristics to be the top-ranked motivating factor to commit fraud?

A. Criminal personality
B. Dislike of boss
C. Dislike of company
D. Living beyond means

A

D. Living beyond means

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4
Q

Which of the following is NOT one of the ways that businesses rationalize illegal conduct according to Silk and Vogel’s research?

A. Regulation is unnecessary because the matters being regulated are unimportant.
B. Government regulations are unjustified because the additional costs of regulations and bureaucratic procedures significantly decrease profits.
C. Corporate violations that involve large sums of money often target a very small number of victims who are able to absorb the sizable losses.
D. Violations aim to protect the value of stock and ensure an adequate return for stockholders.

A

C. Corporate violations that involve large sums of money often target a very small number of victims who are able to absorb the sizable losses.

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5
Q

According to Occupational Fraud 2022: A Report to the Nations, what is the primary reason why organizations decline to prosecute white-collar crime cases?

A. They feel that there is a lack of evidence.
B. They determine that prosecution would be too costly.
C. They plan to recover losses civilly.
D. They believe their internal discipline is sufficient.

A

D. They believe their internal discipline is sufficient.

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6
Q

Which of the following represents one of the sides of the Fraud Triangle?

A. Perceived non-shareable financial need
B. Perceived opportunity
C. Rationalization
D. All of the above

A

D. All of the above

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7
Q

According to the ACFE’s research, employees are the MOST COMMON source of tips that lead to the detection of fraud.

A. True
B. False

A

True

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8
Q

Criminal activities involving corporations stem primarily from the organization’s subcultures and values rather than from the attitudes and characteristics of the individuals committing the crimes.

A. True
B. False

A

True

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9
Q

According to Occupational Fraud 2022: A Report to the Nations, more occupational frauds are committed by men than by women.

A. True
B. False

A

True

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10
Q

According to Diane Vaughan, encouraging employee loyalty through social interactions, such as company parties and social functions, can contribute to the organization being more inherently inclined to commit crime.

A. True
B. False

A

True

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11
Q

Which of the following is an example of the non-shareable financial need component of the Fraud Triangle?

A. Gambling debts
B. Credit card debt from excessive shopping
C. Addiction problems
D. All of the above

A

D. All of the above

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12
Q

According to Occupational Fraud 2022: A Report to the Nations, only a small percentage of perpetrators are punished when they are disciplined internally.

A. True
B. False

A

False

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13
Q

Misbehavior is less likely to be detected and punished in a complex organizational structure than in a simple organizational structure.

A. True
B. False

A

True

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14
Q

An accounting clerk stealing incoming customer payments is an example of:

A. Neither organizational crime nor occupational crime
B. Organizational crime
C. Both organizational crime and occupational crime
D. Occupational crime

A

D. Occupational crime

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15
Q

The term occupational crime covers which of the following types of white-collar offenses?

A. Crimes by individuals
B. Crimes by professionals
C. Crimes by officials
D. All of the above

A

D. All of the above

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16
Q

Which of the following is one of the ways Silk and Vogel found that businesses rationalize illegal or noncompliant conduct?

A. The damage done by violations is spread among a large number of parties
B. Violations aim to protect the job security of employees
C. Compliance with government regulations is too costly
D. All of the above

A

D. All of the above

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17
Q

According to Occupational Fraud 2022: A Report to the Nations, most white-collar crime cases are referred to law enforcement for prosecution.

A. True
B. False

A

True

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18
Q

According to Diane Vaughan, linking employees’ needs and goals to the company’s success can encourage unlawful conduct by individuals on the organization’s behalf.

A. True
B. False

A

True

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19
Q

According to the authors of Crimes of the Middle Classes, advertising influences economic crimes by promising that no one has to settle for second best.

A. True
B. False

A

True

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20
Q

The Fraud Triangle hypothesis can be used to explain every instance of fraudulent conduct.

A. True
B. False

A

False

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21
Q

Dr. Steve Albrecht’s research indicates that the personal characteristics MOST COMMON among fraud perpetrators are a tendency to live beyond their means, an overwhelming desire for personal gain, and high personal debt.

A. True
B. False

A

True

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22
Q

Systems based on the compliance theory of crime control attempt to achieve conformity to the law without having to detect, process, or penalize violators.

A. True
B. False

A

True

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23
Q

While organizations can directly calculate financial damages and losses resulting from a fraud scheme, it is much more difficult to estimate the indirect costs they might face in the future.

A. True
B. False

A

True

24
Q

According to Occupational Fraud 2022: A Report to the Nations, which of the three major categories of occupational fraud has the highest median loss?

A. Corruption
B. Identity theft
C. Asset misappropriation
D. Financial statement fraud

A

D. Financial statement fraud

25
Q

The managements from several IT consulting firms conspire to take turns submitting the lowest bids for all contracts in their area; this is considered an organizational crime.

A. True
B. False

A

True

26
Q

According to Diane Vaughan, an employee who is truly loyal to a company would never commit fraud on the company’s behalf.

A. True
B. False

A

False

27
Q

According to Occupational Fraud 2022: A Report to the Nations, more frauds are uncovered by external audit than by any other form of detection.

A. True
B. False

A

False

28
Q

According to Occupational Fraud 2022: A Report to the Nations, which of the following is the MOST COMMON internal response an organization will take when management discovers that one of its employees has committed fraud?

A. Termination
B. Permitted resignation
C. Suspension
D. Probation

A

A. Termination

29
Q

Edward Gross and other criminologists have asserted that organizations are inherently:

A. Exploitative
B. Averse to misconduct
C. Criminogenic
D. None of the above

A

C. Criminogenic

30
Q

A person’s social status plays no role in their ability to commit white-collar crime.

A. True
B. False

A

False

31
Q

According to criminologist Charles McCaghy, _____________ is/are the single most compelling factor behind deviance by organizations.

A. Government regulation
B. Employee demands
C. Profit pressure
D. None of the above

A

C. Profit pressure

32
Q

Which of the following is NOT one of the factors that Diane Vaughan cites as contributing to organizations being inherently prone to committing crime?

A. Organizations tend to recruit and attract similar individuals.
B. Rewards are given to employees who challenge the company or how it works.
C. Employees are frequently transferred and expected to work long hours.
D. Long-term loyalty is encouraged through company retirement and benefits.

A

B. Rewards are given to employees who challenge the company or how it works.

33
Q

Dr. Steve Albrecht conducted research that focused on fraud-related red flags in two principal categories: perpetrator characteristics and organizational environment. Which of the following was the organizational-environment factor that was most present in the frauds studied?

A. Too much trust in key employees
B. Lack of clear lines of authority
C. Inadequate attention to details
D. None of the above

A

A. Too much trust in key employees

34
Q

Research shows that a criminal’s social status or class is the determining aspect of white-collar crime.

A. True
B. False

A

False

35
Q

Human beings’ innate instinct to do as they are instructed and obey authority figures can result in otherwise ethical employees committing a crime on their organization’s behalf.

A. True
B. False

A

True

36
Q

Which of the following statements BEST exemplifies the rationalization component of the Fraud Triangle?

A. “Management is dishonest, so why shouldn’t I be?”
B. “I’m in so much debt; I don’t have any other way to pay my bills.”
C. “I’m confident I won’t get caught.”
D. “I need the money to repay my drug dealer so that no one will find out about my habit.”

A

A. “Management is dishonest, so why shouldn’t I be?”

37
Q

According to Occupational Fraud 2022: A Report to the Nations, most occupational frauds are committed by _________; median losses are highest in frauds committed by _________.

A. Employees; employees
B. Owners/executives; managers
C. Employees; owners/executives
D. Owners/executives; employees

A

C. Employees; owners/executives

38
Q

Efforts to control corporate crime generally include which of the following approaches?

A. Voluntary changes in corporate attitudes
B. Consumer action
C. Government intervention
D. All of the above

A

D. All of the above

39
Q

Research has shown that many executives justify illegal behavior as simply being common practice in the business world.

A. True
B. False

A

True

40
Q

The indirect costs often experienced by organizations following a fraud include reduced employee productivity, reputational damage, and a loss of competitive advantage.

A. True
B. False

A

True

41
Q

The two primary strategies to control corporate criminal behavior are:

A. Enforcement and compliance
B. Compliance and deterrence
C. Deterrence and enforcement
D. None of the above

A

B. Compliance and deterrence

42
Q

Which of the following is considered a white-collar crime?

A. An accounting clerk steals incoming payments from customers and makes falsified journal entries to cover their tracks
B. A stockbroker profits from trades made based on insider knowledge about a company
C. A city official receives kickbacks for tailoring contract requirements to specific vendors
D. All of the above

A

D. All of the above

43
Q

Which of the following is TRUE regarding organizational structure?

A. Companies with departments that are isolated geographically have a reduced risk of fraud
B. The existence of many specialized departments within a company generally increases the overall risk of fraud within the organization
C. Misbehavior is more likely to be detected in a complex organizational structure than in a simple organizational structure
D. All of the above

A

B. The existence of many specialized departments within a company generally increases the overall risk of fraud within the organization

44
Q

According to Occupational Fraud 2022: A Report to the Nations, what was the MOST COMMON behavioral red flag displayed by perpetrators prior to the discovery of their frauds?

A. Addiction problems
B. Complaining about lack of authority
C. Living beyond their means
D. Divorce or family problems

A

C. Living beyond their means

45
Q

Most people who commit occupational fraud are repeat offenders with prior criminal records.

A. True
B. False

A

False

46
Q

In the area of criminological theory, ____________ is the theory that tries to prevent crime by using the threat of criminal sanctions.

A. Adherence
B. Punishment
C. Deterrence
D. None of the above

A

C. Deterrence

47
Q

Sociologist Edward Gross has asserted that organizations’ reliance on profit makes them inherently prone to committing fraud.

A. True
B. False

A

True

48
Q

According to the authors of Crimes of the Middle Classes, which of the following factors has contributed to the rising problem of economic crime?

A. The increased opportunity for wrongdoing as a result of advancing information technologies
B. The distribution of large amounts of money from government programs
C. The economy’s increased reliance on credit
D. All of the above

A

D. All of the above

49
Q

White-collar defendants are less likely to insist on a trial than other offenders.

A. True
B. False

A

False

50
Q

According to Occupational Fraud 2022: A Report to the Nations, having job rotations or mandatory vacations among employees can help reduce the financial impact of fraud on an organization.

A. True
B. False

A

True

51
Q

According to Dr. Steve Albrecht’s Fraud Scale model, the variables that drive the occurrence of occupational fraud include:

A. Situational pressure
B. Perceived opportunity
C. Personal integrity
D. All of the above

A

D. All of the above

52
Q

As a strategy to control crime, _________ is designed to achieve conformity to the law by providing economic incentives for voluntary adherence to the law and using administrative efforts to control violations before they occur.

A. Compliance
B. Prevention
C. Deterrence
D. None of the above

A

A. Compliance

53
Q

White-collar criminals are more likely to be fined than to face prison terms as punishment.

A. True
B. False
Submit

A

True

54
Q

Cressey found that embezzlers’ offenses are motivated by situations that either threaten their status or threaten to prevent them from achieving a higher status.

A. True
B. False

A

True

55
Q

When ordered by their superiors to commit fraud, many employees will do so even if it conflicts with their personal values, morals, and ethics.

A. True
B. False

A

True

Fraud (9 decks)

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