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141 Cards in this Set

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Which of the following is not a method of honesty testing?
a. graphology
b. voice stress analysis
c. body language test
d. pencil and paper test
c. body language test
Interviews should not be conducted with:
a. suspects
b. coworkers
c. clients
d. interviews can be conducted with all of the above
d. interviews can be conducted with all of the above
People in rationalization state of reaction to a fraud:
a. Make great interviewees because they want to punish the suspect.
b. Want to give the suspect one more chance.
c. Believe without a doubt that the suspect is guilty.
d. Have no sympathy for the suspect.
b. Want to give the suspect one more chance.
Planning for interviews should not involve:
a. Judging the guilt of the suspect based on available documents.
b. establishing a location and time for the interview.
c. ascertaining in advance as many facts as possible about the offense.
d. understanding the attitude of the interviewee.
a. Judging the guilt of the suspect based on available documents.
Confrontational interviews should usually be conducted when:
a. police decide that the suspect is guilty.
b. the examiner is starting the investigation.
c. all other investigative procedures have been completed.
d. the investigation is taking too long.
c. all other investigative procedures have been completed.
Which of the following is not an inquiry technique that should be used by interviewers?
a. use short questions, confined to one topic.
b. maintain full control of the interview.
c. point out some, but not all, of the circumstantial evidence.
d. all of the above are good inquiry techniques in an interview.
d. all of the above are good inquiry techniques in an interview.
Which of the following honesty testing techniques deals with the study of handwriting for the purpose of character analysis?
a. polygraph
b. graphology
c. pencil and paper test
d. voice stress
e. none of the above
b. graphology
Which of the following traits do polygraphs not measure when testing for stress?
a. pulse rate
b. blood pressure
c. galvanic skin response.
d. respiration
e. all of the above are traits measured during a polygraph test.
e. all of the above are traits measured during a polygraph test.
Interviewing is:
a. the systematic questioning of individuals who have knowledge of events, people, and evidence involved in a case under investigation.
b. the process of answering questions from an interviewer for the purpose of finding a job.
c. by far the most common technique use in investigating and resolving fraud.
d. both a and c.
e. none of the above.
d. both a and c.
Which of the following is the typical sequence of reactions to crisis?
a. anger, denial, rationalization, depression, acceptance.
b. rationalization, denial, anger, depression, acceptance.
c. denial, anger, rationalization, depression, acceptance.
d. depression, denial, anger, rationalization, acceptance.
e. None of the above.
c. denial, anger, rationalization, depression, acceptance.
Which of the following reaction frequently involves appearing temporarily stunned, insisting there is some mistake, or not comprehending what has been said?
a. anger
b. denial
c. rationalization
d. depression
e. acceptance
b. denial
Which of the following is a characteristic of a good interview?
a. make the interview as concise as possible.
b. the interviewer should announce his or her bias a the outset, because the interviewee will cooperate better when the interviewee know the type of information the interviewer is seeking.
c. friendly interviewees appear very helpful, but they may have hidden motives and may provide bad information.
d. it is important to schedule interviews ahead of time, especially if you are planning to interview a potentially hostile interviewee.
c. friendly interviewees appear very helpful, but they may have hidden motives and may provide bad information.
Each of the following is a clue that an interviewer is dishonest except:
a. Upon repeated accusations, a dishonest person's denials become more vehement.
b. In order to add credibility to false statements, liars request that the interviewer obtain character testimony from other people .
c. Liars often refuse to implicate possible suspects, or, in other words, honest people are more willing to name others involved in misdeeds.
d. dishonest people frequently cover their mouths with their hands or fingers during deception.
a. Upon repeated accusations, a dishonest person's denials become more vehement.
Which of the following is something that an interviewee might do or feel while in the denial phase?
a. insult, harm, or slander
b. attempt to justify the act
c. become sad, withdraw, or lose interest
d. not comprehend what has been said.
d. not comprehend what has been said.
Which of the following is not a good thing to do during an interview?
a. conduct the interview in private.
b. establish the purpose of the interview.
c. interview more than one person at once.
d. do not invade body space.
c. interview more than one person at once.
A signed statement should include all of the following except:
a. a statement that the fraudster knew the conduct was wrong and intended to commit the act.
b. the date the fraudster was hired by the company.
c. approximate amount of losses.
d. approximate date of the offense.
b. the date the fraudster was hired by the company.
Nonverbal cues of deception include all of the following except:
a. repetition of the question
b. manipulators
c. fleeing positions.
d. crossing the arms.
a. repetition of the question
Financial statement fraud is usually committed by:
a. executives
b. managers.
c. stockholders
d. outsiders
e. both a and b
e. both a and b (a. executives b. managers. )
Which officer in a company is most likely to be the perpetrator of financial statement fraud?
a. chief financial officer (CFO)
b. controller
c. chief operating officer (COO)
d. Chief executive officer (CEO)
d. Chief executive officer (CEO)
When looking for financial statement fraud, auditors should look for indicators of fraud by:
a. examining financial statements.
b. evaluating changes in financial statements
c. examining relationships the company has with other parties.
d. examining the operating characteristics of the company.
e. all of the above.
f. none of the above because auditors don't have a responsibility to find financial statement fraud.
b. evaluating changes in financial statements
The three aspects of management that a fraud examiner needs to be aware of include all of the following except:
a. their backgrounds
b. their motivations
c. their religious convictions
d. their influence in making decisions for the organization
c. their religious convictions
Which of the following is least likely to be considered a financial reporting fraud symptom, or red flag?
a. Grey directors
b. family relationships between directors and officers
c. large increases in accounts receivable with no increase in sales.
d. size of firm
d. size of firm
Many indicators of fraud are circumstantial; that is, they can be caused by nonfraud factors. That fact can make convicting someone of fraud difficult. Which of the following types of evidence would be most helpful in proving that someone committed fraud?
a. missing documentation
b. a general ledger that is out of balance
c. analytical relationships that don't make sense.
d. a repeated pattern of similar fraudulent acts.
d. a repeated pattern of similar fraudulent acts.
In the Phar-Mor fraud case, several different methods were used for manipulating the financial statements. These included all of the following except:
a. funneling losses in to unaudited subsidiaries.
b. overstating inventory
c. recognizing revenue that should have been deferred.
d. manipulating accounts.
a. funneling losses in to unaudited subsidiaries.
Most financial statement frauds occur in smaller organizations with simple management structures, rather than in large, historically profitable organizations. This is because:
a. it is easier to implement good internal controls in a small organization.
b. smaller organizations do not have investors.
c. management fraud is more difficult to commit to when there is a more formal organizational structure of management.
d. people in large organizations are more honest.
c. management fraud is more difficult to commit to when there is a more formal organizational structure of management.
Management fraud is usually committed on behalf of the organization rather than against it. Which of the following would not be a motivation of fraud on behalf of an organization?
a. CEO needs new car
b. A highly competitive industry
c. pressure to meet expected earnings
d. restructure debt covenants that can't be met
a. CEO needs new car
All of the following are indicators of financial statement fraud except:
a. unusually rapid growth of profitability.
b. threat of a hostile takeover.
c. dependence on more than one or two products.
d. large amounts of available cash.
b. threat of a hostile takeover.
During an audit, an auditor considers the conditions of the auditee and plans to audit accordingly. This is an example of which of the following?
a. zero-order reasoning
b. high-order reasoning
c. first-order reasoning
d. fraudulent reasoning
a. zero-order reasoning
In the context of strategic reasoning, if an auditor only follows the established audit plan and does not consider other factors relating to the auditee, then this is an example of which of the following?
a. zero-order reasoning
b. high-order reasoning
c. first-order reasoning
d. fraudulent reasoning
a. zero-order reasoning
In recent years, many SEC investigations have taken place on the improper issuance of stock options to corporate executives. These practices increase executive compensation at the expense of shareholders. This practice is known as:
a. backdrafting stock options.
b. backdating stock options.
c. stock option reversals.
d. stock option extensions.
b. backdating stock options.
The most common accounts(s) manipulated when perpetrating financial statement fraud are:
a. expenses
b. inventory
c. revenues
d. accounts payable
c. revenues
Why might a company want to understate net income?
a. to increase profits
b. to increase stock price
c. to gain consumer confidence
d. to pay less taxes
d. to pay less taxes
Reported revenue and sales account balances that appear too high are examples of:
a. analytical symptoms
b. documentary symptoms
c. lifestyle symptoms
d. verbal symptoms
a. analytical symptoms
Horizontal analysis is a method that;
a. examines financial statement numbers from period to period
b. examines percent changes in account balances from period to period.
c. examines transactions from period to period.
d. none of the above
b. examines percent changes in account balances from period to period.
Adding fictitious receivables will usually result in a(n):
a. Sales return percentage that remains constant.
b. Increased sales discount percentage.
c. Increase in accounts receivable turnover.
d. Increase in the number of days in receivables.
d. Increase in the number of days in receivables.
Comparing recorded amounts in the financial statements with real-world assets they are supposed to represent would be most effective in detecting:
a. Cash and inventory fraud
b. accounts payable fraud
c. revenue-related fraud
d. accounts receivable fraud.
a. Cash and inventory fraud
Lifestyle symptoms are most effective with:
a. revenue-related financial statement frauds
b. inventory-related financial statement frauds
c. employee frauds
d. accounts payable financial statement fraud.
c. employee frauds
Which one of the following is not an inventory-related documentary symptom?
a. duplicate purchase orders
b. missing inventory during inventory counts
c. unsupported inventory sales transactions
d. all of the above are inventory-related documentary symptoms.
d. all of the above are inventory-related documentary symptoms.
When looking for inventory fraud, an important question to ask is:
a. What is the nature of inventory?
b. What is the age of inventory?
c. What is the salability of the inventory?
d. All are important questions to ask.
d. All are important questions to ask.
Which of the following ratios would not generally be used to look for inventory and cost of goods sold-related frauds?
a. accounts payable turnover
b. gross profit margin
c. inventory turnover
d. number of days sales in inventory
a. accounts payable turnover
In order to analyze financial statements for fraud, an auditor or fraud examiner should consider all of the following except:
a. the types of accounts that should be included in the financial statements
b. the types of fraud to which the company is susceptible
c. the nature of the company's business and industry.
d. the auditor should consider all of the above.
d. the auditor should consider all of the above.
Last-minute revenue adjustments, unsupported balance sheet amounts, and improperly recorded revenues are examples of:
a. analytical symptoms
b. documentary symptoms
c. control symptoms
d. perceptional symptoms
b. documentary symptoms
Accounts that can be manipulated in revenue fraud include all of the following except:
a. accounts receivable
b. bad debt expense
c. inventory
d. sales discounts
c. inventory
Which financial ratio is not useful in detecting revenue related fraud?
a. gross profit margin ration
b. account receivable turnover ratio
c. asset turnover ration
d. all of the above are useful revenue-related fraud detection ratios
d. all of the above are useful revenue-related fraud detection ratios
The asset turnover ratio measures:
a. The average time an asset is used by an the company.
b. The average useful life of capital assets.
c. Sales that are generated with each dollar of assets.
d. Assets that are purchased with each dollar of sales.
d. Assets that are purchased with each dollar of sales.
The most common way to overstate revenues is to:
a. Record revenues prematurely
b. abuse the cutoff line for recording revenues.
c. create fictitious revenues.
d. none of the above
c. create fictitious revenues
Which of the following is a possible scheme for manipulating revenue when returned goods are accepted from customers?
a. understate allowance for doubtful accounts (thus overstating receivables)
b. record bank transfers when cash is received from customers.
c. write off uncollectible receivables in a later period.
d. avoid recording of return goods from customers.
c. write off uncollectible receivables in a later period.
All of the following ratios are useful in detecting large revenue fraud except:
a. gross profit margin
b. current ratio
c. working capital turnover
d. accounts receivable turnover
b. current ratio
Each of the following illicit revenue transactions is correctly linked with the financial statement accounts involved except:
a. Recognizing revenues to early - accounts receivable, revenue.
b. Understate allowance for doubtful accounts - bad debt expense, allowance for doubtful accounts
c. don't write off uncollectible receivables - sales returns, sales discounts
d. don't record discounts given to customers- cash, sales discounts, accounts receivables
e. Record returned goods after the end of the period - Sales returns, Accounts receivable
c. don't write off uncollectible receivables - sales returns, sales discounts
Identify which ration is correctly linked to the information it could reveal about the company's potential for revenue fraud.
a. Gross profit margin - this ratio will increase if management overstates inventory
b. sales return percentage - a sudden decrease in this ratio can mean that customer discounts are not being recorded in the accounting records
c. allowance for uncollectible as a percent of receivables - when a company records fictitious receivables, this ration increases.
d. operating profit margin - a dramatic decrease in this ratio could indicate fraud.
a. Gross profit margin - this ratio will increase if management overstates inventory
Which of the following is a common way to perform financial statement analysis which searching for revenue-related analytical symptoms?
a. Look for unusual changes in revenue-related account balances from period to period (trends).
b. Look for unusual changes in revenue-related relationships from period to period.
c. Look for unusual changes in cost of goods sold account from period to period.
d. Both a and b are common ways to perform within-statement analysis while searching from revenue -related analytical symptoms.
e. all of the above are common ways to perform financial-statement analysis while searching for revenue-related analytical symptoms.
d. Both a and b are common ways to perform within-statement analysis while searching from revenue -related analytical symptoms.
Primarily occurring at the end of the year in an attempt to inflate sales, the practice of shipping more items to distributers than they can sell in a reasonable time period is known as:
a. lapping
b. channel stuffing
c. bill and hold transactions
d. consignment sales
b. channel stuffing
Which one of the following is a primary type of transaction that can create liabilities for a company?
a. purchasing inventory
b. borrowing money
c. selling purchased goods
d. leasing assets
e. all of the above
e. all of the above
When accounts payable-related liabilities are understated, purchases and inventory are often __________, or the financial statements don't balance.
a. overstated
b. understated
c. selling purchased goods
d. leasing assets
e. all of the above
b. understated
Recognizing something as a revenue instead of as a liability has a positive effect on the reported financial statements because:
a. It understates liabilities
b. it overstates revenues
c. it overstates net income
d. in overstates assets
e. all of the above
f. a, b, and c are correct
f. a, b, and c are correct
The most common fraud involving car companies and warranties they offer would most likely be:
a. understanding accrued liabilities
b. recognizing unearned revenue
c. not recording or under recording future obligations
d. not recording or under recording various types of debt
c. not recording or under recording future obligations
FAS 5 requires contingent liabilities to be recorded as liabilities on the balance sheet if the likelihood of loss or payment is:
a. remote
b. reasonably possible
c. probable
d. not determinable
c. probable
Analytical symptoms of accounts payable fraud most often relate to reported "accounts payable" balances that appear:
a. too low
b. too high
c. too perfect
d. unchanged
a. too low
Proactively searching for analytical symptoms related to financial statement fraud means that we are looking for accounts that appear:
a. too low
b. too high
c. unusual
d. all of the above
d. all of the above
When focusing on changes, you should consider changes from period to period in:
a. recorded balances
b. relationships between balances
c. balances of other nonsimilar companies
d. both a and b
c. all of the above
d. both a and b (a. recorded balances
b. relationships between balances)
Overstating cash is usually difficult because:
a. Cash balances can be easily confirmed with banks and other financial institutions.
b. Cash is hard to steal.
c. Cash is normally not a fraudulent account.
d. Cash is usually a small asset.
a. Cash balances can be easily confirmed with banks and other financial institutions.
Inadequate disclosure fraud usually involves:
a. statements in the footnotes that are wrong but do not impact the financial statement.
b. disclosures that should have been made in the footnotes but were not.
c. both a and b
d. neither a nor b
c. both a and b
When examining whether a company has under-recorded accounts payable, each of the following ratios is helpful except:
a. acid-test ratio
b. accounts payable/purchases
c. accounts payable/ cost of goods sold
d. unearned revenue/ accounts payable
e. current ratio
d. unearned revenue/ accounts payable
Each of the following is a symptom relating to understatement of liability frauds except:
a. original purchase-related records where copies could exist.
b. denied access to records, facilities, certain employees, customers, vendors, or others from whom audit evidence might be sought.
c. last-minute adjustments by the entity that significantly affect financial results.
d. missing documents
e. all of the above are documentary symptoms of understatement of liability fraud
a. original purchase-related records where copies could exist.
Each of the following assets is correctly linked with how it can be overstated except:
a. Inventory can be overstated by improperly capitalizing these assets.
b. Marketable securities can be overstated because they are not widely traded, and it is difficult to assign an accurate value to the securities.
c. fixed assets can be overstated by leaving expired assets on the books.
d. assets can be inflated in mergers, acquisitions, and restructurings by having the wrong entity act as the acquirer.
a. Inventory can be overstated by improperly capitalizing these assets.
Which of the following factors does not make fraud more difficult to detect?
a. collusion with outsiders
b. forgery, which GAAS auditors are not routinely trained to detect
c. off-book frauds in which no records on the company's books are fraudulent
d. all of the above make fraud more difficult to detect.
d. all of the above make fraud more difficult to detect.
A form 1099 with missing withholdings (where they should be reported) may be a fraud symptom for which liability account?
a. accounts payable
b. unearned revenues
c. contingent liabilities
d. accrued liabilities
d. accrued liabilities
In liability fraud, liabilities are most often:
a. understated
b. overstated
c. recorded as assets.
d. recorded as expenses.
a. understated
Which of the following is usually the hardest fraud to detect?
a. liability fraud
b. revenue fraud
c. asset fraud
d. disclosure fraud
d. disclosure fraud
You observe that a company's current ratio is dramatically increasing. This may indicate fraud in that:
a. contingent liabilities are not recorded
b. accounts payable is understated
c. expenses have been inappropriately capitalized as assets
d. fixed assets are overstated
e. two of the above are true.
b. accounts payable is understated
Of the following, the most difficult account for management to intentionally misstate is:
a. income taxes payable
b. cash
c. securities
d. prepaid expenses
b. cash
Which of the following is not a way to under-record liabilities?
a. borrowing but not disclosing debt incurred on existing lines of credit.
b. claiming that existing debt has been forgiven by creditors.
c. not recording loans incurred
d. all of the above are ways to under record liabilities.
d. all of the above are ways to under record liabilities.
When looking for accounting or documentary symptoms of fraud when a merger occurs, one of the first steps should be to:
a. make sure that the purchasing company got a fair deal.
b. make sure that the selling company properly disclosed its financial troubles.
c. make sure that both the buyer and the seller were content with the deal.
d. make sure that the accounting methods used were appropriate and consistent with accounting standards.
d. make sure that the accounting methods used were appropriate and consistent with accounting standards.
Most frauds against organizations are perpetrated by:
a. employees
b. owners
c. vendors
d. a collusion of two of the above.
d. a collusion of two of the above.
What are the three major classes of asset misappropriation?
a. stealing receipts, purchasing fraud, and disbursement fraud
b. stealing receipts, stealing money as it comes into a company, and purchasing fraud.
c. stealing receipts, disbursement fraud, and stealing assets on hand
d. stealing receipts, stealing inventory, and stealing information
c. stealing receipts, disbursement fraud, and stealing assets on hand
Out of all the types of fraud discussed in this chapter, which type is perpetrated least often?
a. skimming schemes
b. larceny
c. check schemes
d. payroll
b. larceny
Which of the following is not one of the most common billing schemes?
a. Setting up dummy companies to submit invoices to the victim organization
b. changing the quantity or price on an invoice to favor a customer.
c. altering or double-paying nonaccomplice vendor's statements.
d. making personal purchase with company fruads
b. changing the quantity or price on an invoice to favor a customer.
The most affected party in a workers' compensation fraud case is which of the following?
a. employer
b. employer's insurance carrier
c. other employees
d. government
b. employer's insurance carrier
Which of the following is a major difference between larceny and skimming?
a. Larceny is committed before the cash is entered into the accounting system, while skimming is committed after the cash is entered into the system.
b. Larceny is committed after the cash is entered into the accounting system, while skimming is committed before the cash is entered into the system.
c. Larceny involves fraudulent disbursements of cash, while skimming involves fraudulent receipts of cash.
d. Larceny involves fraudulent receipts of cash, while skimming involves fraudulent disbursements of cash.
b. Larceny is committed after the cash is entered into the accounting system, while skimming is committed before the cash is entered into the system.
Which of the following types of disbursement fraud occurs least frequently?
a. expense tempering
b. payroll schemes
c. register disbursement schemes
d. billing schemes
c. register disbursement schemes
Which of the following results in the highest loss per case?
a. expense tampering
b. payroll schemes
c. register disbursement schemes
d. billing schemes
d. billing schemes
Which of the following is not considered a misappropriation of assets?
a. payroll disbursement schemes
b. kickbacks
c. expense schemes
d. skimming
b. kickbacks
Which of the following is not true of billing schemes?
a. the perpetrator takes physical possession of his/her employer's cash.
b. the perpetrator often sets up a "dummy" company
c. it is one of the most commonly committed disbursement schemes.
d. it usually involves dealing with the victims organization's purchasing department
a. the perpetrator takes physical possession of his/her employer's cash.
Which of the following is not one of the ACFE's types of fraudulent disbursement?
a. Check-tampering schemes
b. skimming disbursement schemes
c. expense schemes
d. register disbursement schemes
b. skimming disbursement schemes
"Putting someone on the payroll who does not actually work for the victim company" is an example of a(n):
a. expense scheme
b. payroll scheme
c. register disbursement scheme
d. commission scheme
b. payroll scheme
One key element of skimming is that cash is taken:
a. directly from the cash register
b. when no one is watching
c. by someone who does not ordinarily have cash-handling responsibilities
d. prior to its entry into an accounting system
d. prior to its entry into an accounting system
Phishing is a method of:
a. using e-mail or other internet applications to deceive people into disclosing valuable personal information.
b. convincing a person to divulge personal information over the telephone.
c. hacking into another's computer files to access personal information.
d. hiring a con artist to steal personal information from a person.
a. using e-mail or other internet applications to deceive people into disclosing valuable personal information.
Multilevel marketing companies:
a. are illegal
b. increase their distribution process by recruiting additional company sales representatives.
c. con legally pay commission to representatives for simply signing up new recruits.
d. require little time and effort to be successful.
b. increase their distribution process by recruiting additional company sales representatives.
In order to protect yourself from identity theft, you should:
a. only give out your social security number when purchasing a product online or over the telephone.
b. always shred receipts, credit card offers, doctor's bills, insurance information, or any other documents that contain sensitive personal information.
c. leave your wallet at home or in the car.
d. maintain the same password for every personal account.
e. do all of the above.
b. always shred receipts, credit card offers, doctor's bills, insurance information, or any other documents that contain sensitive personal information.
The Gramm-Leach-Bliley Act gives you the right to:
a. periodically change your social security number to avoid identity theft
b. receive a yearly stipend to cover the losses incurred as a victim of identity fraud
c. claim your high credit report although an identity fraudster has damaged it severely.
d. sue the perpetrator for more money than he or she defrauded from you.
e. opt out of having your personal information sold to organizations.
e. opt out of having your personal information sold to organizations.
If you become a victim of identity theft, you should first:
a. Wait to see where the perpetrator is spending your money; then, using this information, plan an investigation with the local FBI organization.
b. Contact friends and neighbors to inquire if they have any useful information about the perpetrator.
c. contact the Federal Trade Commission for assistance and advice.
d. do none of the above.
c. contact the Federal Trade Commission for assistance and advice.
Which of the following is a common characteristic of fraudulent money offer letters?
a. the letter will ask for help, convincing the victim that assistance is desperately needed.
b. through the letter, the perpetrator will try to build a relationship of trust with the victim.
c. the letter promises the victim a large amount of money for little or no effort on the victim's part
d. the letter will make the victim feel that the or she is the only person receiving the "once in a lifetime" offer
e. all of the above
e. all of the above
The major reason that elderly people are so susceptible to telemarketing fraud is that they:
a. are often financial in need
b. have an excess amount of cash to invest
c. are often lonely and enjoy talking to friendly callers
d. are none of the above.
c. are often lonely and enjoy talking to friendly callers
Consumers should provide credit card numbers or bank account information over the telephone only when:
a. they initiated the call and are purchasing a legitimate product.
b. the are asked to give the information.
c. the entity receiving this information is a legitimate company.
d. they feel confident that the receiving entity will protect such information.
e. doing so qualifies them to receive certain financial benefits.
a. they initiated the call and are purchasing a legitimate product.
What is the best defense against consumer fraud?
a. Signing up with the national do not call registry
b. purchasing credit card insurance.
c. educating yourself about credit card risks
d. call the Federal Trade Commission (FTC)
c. educating yourself about credit card risks
What does "https" stand for?
a. Hypertext transfer point (secure)
b. Hypertext transfer point (site)
c. Hypertext transfer protocol (system)
d. Hypertext transfer protocol (sign)
e. Hypertext transfer protocol (secure)
e. Hypertext transfer protocol (secure)
Which federal statute requires that credit reports can only be obtained for legitimate business needs?
a. Title 15 us code sec 1692
b. final rule - 45 cft parts 160 and 165
c. title 15 us code, chapter 41
d. title 15 us code sec 1681
d. title 15 us code sec 1681
Which of the following is not listed in the chapter as common characteristic of Nigerian scam letters?
a. the promise of money to lure victims
b. urgency to invest quickly
c. picture of perpetrator to assure victims
d. strong ties to high-ranking foreign officials to lure victims
c. picture of perpetrator to assure victims
Which of the following instructions would not be very helpful to call in the event of identity theft?
a. IRS
b. social security administration
c. local chamber of commerce
d. a credit reporting agency
c. local chamber of commerce
What is one way to determine if a web site is secure or not?
a. Look for the official logo of the company you want to deal with.
b. look for an "s" after the "http" in the URL of the web site
c. click on a link to see if it works
d. call the FTC and ask about the ISP address of the web site
b. look for an "s" after the "http" in the URL of the web site
Those most susceptible to consumer fraud are often:
a. Uneducated or elderly
b. wealthy and prominent
c. troubled with credit card debt
d. lonely and depressed
a. Uneducated or elderly
Which of the following is not a type of tax fraud?
a. using a false social security number
b. overstating income
c. keeping two sets of financial books
d. claiming a dependent when you do not have one.
b. overstating income
Which of the following describes a Chapter 13 bankruptcy?
a. all assets are liquidated and used to pay creditors
b. reorganizations can be used by individuals with debts less than $1 million
c. the entity is given time to reorganize its financial affairs, settle debts, and continue operations
d. debtors receive all their payments up from
liquidated assets.
b. reorganizations can be used by individuals with debts less than $1 million
Bankruptcy courts do not have which of the following responsibilities?
a. appointing trustees, examiners, and committees.
b. supervising bankruptcy petitions
c. approving reorganization plans
d. conducting hearings and trials to resolve disputes
a. appointing trustees, examiners, and committees.
Which of the following is not a characteristic of an affidavit of proposed investigator?
a. Content an extent of detail required does not vary by jurisdiction
b. is prepared when a fraud investigator is retained
c. legal document is sworn under oath and must be notarized.
d. addressed to the court and is submitted by an attorney for the person who engaged the investigator
a. Content an extent of detail required does not vary by jurisdiction
Which of the following is the least likely symptom of a bust-out?
a. Company's only listed address is a post office box
b. dramatic increase in size of credit orders
c. public notice of change in management
d. sudden decrease in inventory
c. public notice of change in management
Which of the following is the major reason why there is so much divorce fraud?
a. assets are being taken away from one divorce partner and given to another.
b. divorce proceedings usually take a long time
c. states make divorces very difficult
d. children usually get most asset in divorce cases
a. assets are being taken away from one divorce partner and given to another.
Which of the following investigative methods would most likely be used more in divorce cases then in bankruptcy cases?
a. surveillance
b. public records searches
c. subpoena of private records
d. interviews
a. surveillance
The person appointed by a bankruptcy judge in an Chapter 11 proceeding who investigates allegations of fraud or misconduct by the debtor or its principals is a(n):
a. creditor
b. adjuster
c. auditor
d. examiner
d. examiner
The retention of a fraud investigator in a bankruptcy proceeding must be approved by the bankruptcy judge unless:
a. the debtor's estate pays the investigator
b. the trustee pays the investigator
c. the creditor's committee pays the investigator
d. an individual creditor or shareholder pays the investigator
d. an individual creditor or shareholder pays the investigator
Which of the following is not an indicator of a possible bust-out?
A. an address that is a post office box
b. new ownership of a company
c. slow buildup of inventory
d. dramatic increase in the size of credit orders
c. slow buildup of inventory
Which of the following is an indicator of possible hiding of assets in a divorce?
a. assets transferred to an off-site location
b. changing the title to assets
c. payments made to fictitious individuals
d. all of the above are indictors of possible hiding of assets.
d. all of the above are indictors of possible hiding of assets.
Which of the following is not a way that individuals can commit to tax fraud?
a. overstating the amount of deductions
b. keeping two sets of books
c. paying the least amount of taxes the individual owes
d. making false entries in books and records
c. paying the least amount of taxes the individual owes
The Criminal Investigation Division's chief responsibility is to:
a. Detect taxpayers who willfully and intentionally violate their known legal duty of voluntarily filing an income tax return
b. check the accuracy of tax returns
c. detect the fraud in public corporations' tax filings.
d. detect the fraud in u.s. citizens tax filings
a. Detect taxpayers who willfully and intentionally violate their known legal duty of voluntarily filing an income tax return
Which of the following is not an example of tax fraud?
a. using a false social security number
b. keeping two sets of financial books
c. reporting information regarding passive income
d. claiming a blind spouse as a dependent when you are single.
c. reporting information regarding passive income
If an audit reveals that an individual has underpaid his or taxes, they auditor:
a. Can assess civil fines
b. can assess penalties
c. can refer the case to the Criminal Investigation Division
d. An auditor can do all of the above
d. An auditor can do all of the above
To work as an entry-level CI special agent,
a. You must be a US citizen
b. you must not be older than 37 years of age.
c. you must have completed a four-year course of study or earned a bachelor's degree.
d. you must meet all of the above conditions
d. you must meet all of the above conditions
Which of the following is not a fraud risk unique to e-business transactions?
a. Innovative technologies where security lags process development
b. selling new products
c. complex information systems
d. removal of personal contact
b. selling new products
E-business transactions make it easier to commit which of the following types of frauds?
a. kickbacks
b. customer impersonation
c. setting up dummy companies
d. stealing petty cash
b. customer impersonation
Which of the following is not an element of a company's control environment?
a. audit committee participation
b. management's philosophy
c. hiring policies
d. independent checks
c. hiring policies
Which of the following is not an internal control activity or procedure?
a. Physical safeguards
b. segregation of duties
c. internal auditors
d. documents and records
c. internal auditors
Which of the following fraud risks involves changing IP addresses?
a. Spoofing
b. sniffing
c. False Web sites
d. Customer impersonation
a. Spoofing
Which of the following fraud risks involves viewing information as it passes along network channels?
a. sniffing
b. spoofing
c. false web sites
d. web hijacking
a. sniffing
Using a subtly different Internet host name to mimic another business is known as:
a. spoofing
b. sniffing
c. web-visit hijacking
d. falsified identity
c. web-visit hijacking
Passwords and biometrics are both:
a. authorization controls
b. independent check controls
c. physical controls
d. document controls
a. authorization controls
Which of the following human features is generally not used in biometrics?
a. fingerprints
b. voice tones
c. retina patterns
d. weight
d. weight
Which of the following types of controls is least often used to protect IT processing equipment?
a. physical controls
b. authorization controls
c. independent checks or reference
d. documents and records
d. documents and records
What is the most important factor in control effectiveness?
a. clear policies regarding controls
b. an understanding of e-business networks
c. the use of random monitoring
d. the "tone at the top"
d. the "tone at the top"
Secure Web connections are based in
a. dns.
b. ftp.
c. https.
d. ftps.
c. https.
To be convicted in a criminal case, the standard of evidence is:
a. Beyond a shadow of a doubt
b. beyond a reasonable doubt
c. preponderance of evidence
d. all of the above
b. beyond a reasonable doubt
Most court cases are decided in state courts, except when:
a. Federal laws are in question
b. the case involves several states
c. the amount exceeds $100,000
d. both a & b are correct
d. both a & b are correct
What is/are the distinguishing factor(s) between the lower and higher state trial courts?
a. amount of monetary damage
b. seriousness of the crime
c. availability of the court
d. both a & b
e. all of the above
d. both a & b
Which of the following rights is not provided by the Fifth Amendment?
a. individuals are protected form double jeopardy (being tried twice for the same crime)
b. states cannot seize private property without just compensation
c. individuals have the right to refuse to incriminate themselves
d. Miranda rights must be read upon arrest
b. states cannot seize private property without just compensation
During a trial deposition, expert witnesses should:
a. respond aggressively
b. bring notes and work papers to cite.
c. answer questions convincingly, without hedging their answers
d. memorize well-crafted responses to say what they think sounds effective
b. bring notes and work papers to cite.
During cross-examination, expert witnesses should:
a. Address areas outside of their areas of expertise.
b. appreciate opposing council when they act very friendly.
c. respond evasively and ambiguously to tough questions
d. maintain the same positions taken during direct testimony.
d. maintain the same positions taken during direct testimony.
Fraud investigators can assist in case in which of the following ways?
a. by preparing questions to ask opposing witnesses during depositions.
b. by evaluating whether documents produced by the opposing side satisfy a production request because of their knowledge of a case
c. by assisting in the preparation of a production request because of their knowledge of a case
d. by a and b
e. by a, b, and c
d. by a, b, and c
When deposing an expert witness, the opposing attorneys try to achieve all of the following goals except:
a. understanding the expert's opinion
b. understanding the expert's credentials
c. seeking admission of guilt
d. obtaining an assessment of how difficult the expert will be in the case.
c. seeking admission of guilt
Having a civil trial before a criminal trial has which of the following benefits?
a. defendant may make admissions during civil trial that can be used in criminal trial
b. great access to documents of the defendant
c. defendant is not guaranteed the right to an attorney
d. both a and b
d. both a and b
Which of the following is not one of the common stages of a criminal case?
a. filing a criminal charge
b. filing a complaint
c. discovery
d. trial and appeal
b. filing a complaint
Which of the following actions of fraud victims pursue after sufficient evident is obtained?
a. prosecute in criminal court
b. pursue civil litigation
c. take no action at all
d. two of the above
d. two of the above
The Fourth Amendment requires that probable cause exist before a defendant is arrested or searched. Which of the following levels of evidence is necessary to show probably cause?
a. less than certainty, but more than speculation or suspicion
b. speculation or suspicion
c. beyond a reasonable doubt
d. preponderance of the evidence
a. less than certainty, but more than speculation or suspicion