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40 Cards in this Set
- Front
- Back
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Which of the following is not one of the categories of employee fraud symptoms?
A)Accounting Anomalies B)Tips and Complaints C)Firm Structure D)Analytical anomalies |
Firm Structure
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Which of the following is not one of the three elements of fraud?
A)Theft act B)Conversion C)None of the Above D)Concealment E)Coercion |
Coercion
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Which of the following indicate common fraud systems relating to ledgers?
A)A ledger that does not balance B)Ledger that balances too perfectly C)Master account balances that do not equal the sum of the individual customer vendor balances D)Both a and c |
Both a and c
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Which of the following is <i>not</i> a common internal control fraud symptom or problem?
A)Unexplained adjustments to receivables, payables, revenues, or expenses B)Overriding of existing controls C)Lack of independent checks D)Lack of segregation of duties |
Unexplained adjustments to receivables, payables, revenues, or expenses
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Embezzlement of assets reduces the left side of the accounting equation. To conceal the theft, the embezzler must find a way to reduce the right side of the accounting equation. A perpetrator would most likely reduce the right side of the equation by
A)Increasing expenses B)Reducing accounts payable C)Altering stock accounts D)Paying dividends |
Increasing expenses
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Which of the following is <i>not</i> a fraud symptom related to source documents?
A)A tip from an employee B)Photocopied documents C)Missing documents D)Duplicate payments |
A tip from an employee
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Once in a while, someone commits fraud or another crime and does not feel stress. Such people are referred to as
A)Altruistic B)Psychopathic C)Magnanimous D)Philanthropic |
Psychopathic
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In the three elements of fraud (theft act, concealment, and conversion), who is usually in the best position to detect the fraud?
A)Vendors B)Owners C)Customers D)Coworkers and managers |
Coworkers and managers
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Most people who commit fraud
A)Use embezzled funds to build a savings account B)Give the embezzled funds to charity C)Experience no change in their lifestyle D)Use the embezzled funds to improve their lifestyle E)None of the above |
Use the embezzled funds to improve their lifestyle
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Which of the following is true regarding fraud?
A)It is seldom observed B)When an allegation of fraud is made, there is no question whether a crime has been committed C)Many witnesses are usually available when fraud occurs D)It is easily identified |
It is seldom observed
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Fraud is usually detected by recognizing and pursuing
A)Symptoms B)Legends C)Synonyms D)Equity |
Symptoms
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When a person commits a crime
A)He or she usually becomes friendly and nice B)He or she will experience no changes in behavior C)He or she experiences a lower stress level D)He or she usually becomes engulfed by emotions of fear and guilt |
He or she usually becomes engulfed by emotions of fear and guilt
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If the perpetrator has stolen assets, which of the following is the easiest method of concealing the theft?
A)Increase other assets (such as receivables) B)Reduce liabilities (such as payables) C)Increase expenses D)Manipulate dividends or stock accounts |
Increase expenses
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Which of the following is <i>not</i> a reason why coworkers and others are hesitant to come forward with information about suspected fraud?
A)Given certain red flags, one can generally be certain that fraud is occurring and who is the perpetrator. B)Employees and others are sometimes intimidated by perpetrators C)Many people are conditioned to believe that it is not good to squeal on others, even when it appears that they are doing something wrong. D)They have read or heard horror stories about what happens to whistle-blowers. |
Given certain red flags, one can generally be certain that fraud is occurring and who is the perpetrator.
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Which of the following is <i>not</i> a fraud symptom related to journal entries?
A)Unexplained adjustments to receivables, payables, revenues, or expenses B)Journal entries that do not balance C)Journal entries made near the beginning of accounting periods D)Journal entries without documentary support |
Journal entries made near the beginning of accounting periods
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A letter is most likely to be fraudulent if
A)It is a photocopy of an original letter. B)It is addressed to an individual, rather than a department. C)It is signed only by one person. D)It is written on outdated company letterheads. C) |
It is a photocopy of an original letter.
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Which of the following is a fraud symptom related to an internal control weakness?
A)Lack of proper authorization B)Lack of independent checks C)Inadequate accounting system D)Lack of physical safeguards E)All of the above |
All of the above
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Most people who commit fraud use the embezzled funds to save for retirement.
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False
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It is safe to assume that fraud has not occurred if one or more elements of the fraud triangle can not be observed
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False
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Psychopaths feel no guilt because they have no conscience.
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True
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Because of the nature of fraud, auditors are often in the best position to detect its occurrence.
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False
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The fraud elements consist of concealment, conversion, and completion.
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False
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Internal control is composed of the control environment, the accounting system, and control procedures (activities).
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True
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Nearly all individuals and organizations are subject to pressures and can rationalize.
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True
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Coworkers are usually in the best position to detect fraud.
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True
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A check is an example of a source document
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True
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Analytical fraud symptoms are the least effective way to detect fraud.
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False
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First-time offenders usually exhibit no psychological changes.
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False
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Auditors can best help detect fraud in conversion.
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False
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Fraud perpetrators often live beyond their means since their income does not support their lifestyle.
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True
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Internal control weaknesses give employees opportunities to commit fraud.
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True
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Some complaints and tips turn out to be unjustified.
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True
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Fraud perpetrators who manipulate accounting records to conceal embezzlements often attempt to balance the accounting equation by recording expenses.
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True
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Recording an expense is a possible way to conceal the theft of cash.
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True
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Fraud is a crime that is seldom observed.
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True
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Studies generally find that the most common internal control problem when frauds occur is having a lack of proper authorizations.
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False
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New whistle-blowing laws have helped make tips and complaints more effective.
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True
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Most people who commit fraud are under financial pressure.
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True
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As fraud perpetrators become more confident in their fraud schemes, they steal and spend increasingly larger amounts.
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True
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Analytical anomalies are present in every fraud.
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False
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