Checks are excellent sources of physical evidence.
> Why is it important to conduct a thorough fraud investigation when fraud is suspected?
> Why is it important to detect fraud early?
> How does a company assess and mitigate the risk of fraud within an organization?
> How does building a culture of honesty and high ethics help to reduce the possibility of fraud?
> How is power used to influence another person to participate in an already existing fraud scheme?
> Why might management avoid taking legal action against fraud perpetrators? What are the perceived benefits of inaction? What are the costs?
> Why might pursuing civil remedies be ineffective against employee fraud? When might civil actions be more useful?
> Why is fraud prevention so important?
> What were Jim Bakker's pressures, opportunities, and rationalizations to commit fraud?
> How does rationalization contribute to fraud?
> Employee transfers, audits, and mandatory vacations are all ways to provide independent checks on employees.
> One common investigation procedure determines how perpetrators convert or spend their time.
> What are some common factors that provide opportunities for fraud?
> What are some of the internal controls that prevent and/or detect fraudulent behavior?
> What are some different types of pressures?
> What is the fraud scale, and how does it relate to pressure, opportunity, and integrity?
> What is the fraud triangle, and why is it important?
> What motivates people to commit fraud?
> What is power?
> In what ways did Dr. Sam Waksal rationalize his illegal and unethical actions?
> What types of people commit fraud?
> Do you think the demand for careers in fraud prevention and detection is increasing or decreasing? Why?
> Fraud perpetrators who manipulate accounting records to conceal embezzlements often attempt to balance the accounting equation nation by recording expenses.
> How do employee fraud and management fraud differ?
> What are some of the different types of fraud fighting careers?
> Why was Charles Ponzi so successful with his fraud scheme?
> For each of the following. indicate whether it is a characteristic of a civil or a criminal case: a. Jury may consist of fewer than 12 jurors. b. Verdict must be unanimous. c. Multiple claims may be joined in one action. d. "Beyond a reasonable doubt
> What is the difference between civil and criminal laws?
> List and describe the five different types of frauds.
> How does fraud affect individuals, consumers, and organizations?
> Why does it usually require trust for someone to be able to commit a fraud?
> Describe the relationship between fraud, net income, profit margin, and the revenue required to make up for fraud losses.
> Why are accurate fraud statistics hard to find?
> An increase in a person's net worth plus living expenses equals the person's total income.
> What is fraud?
> In your own words describe the purpose of the ACFE.
> Your best friend wants to know why "on earth" you are taking a fraud examination class. He is curious about what careers this class prepares you for. Go to the Internet and find information about two different careers that you could pursue in the field o
> Visit the Association of Certified Fraud Examiner's (ACFE's) Web site at www.acfe.com. Once you have logged on, explore the pages of the site and then answer the following questions: a. How many professionals make up the (ACFE)? b. What are the require
> Locate the Web site of the American Society of Questioned Document Examiners (ASQDE) at www .asqde.org. What is the ASQDE? What is its purpose?
> Today, many data analysis tools are available to provide assistance to fraud examiners when searching for possible fraudulent activities within a company. Visit the Association of Certified Fraud Examiners' Web site (www.acfe.com) and list some of the co
> Read the article entitled "Following Benford's Law, or Looking Out for No. 1" found at www.rexswain. com/benford.html. The article mentions that a statistics professor can easily discern if students nipped a coin 200 times or if they merely faked it. Of
> As long as a sample is selected randomly, it will always be representative of the population as a whole.
> Discovery sampling is probably the most difficult of all statistical sampling variations to understand.
> Concealment investigative methods sometimes involve the study of documents that have been manipulated.
> The net worth method cannot help in determining the extent of stolen funds.
> Evidence should be uniquely marked so it can be easily identified later.
> There is no difference between forensic document experts and graphologists.
> Photocopies are always preferable to original documents as evidence.
> Traditional chain of custody evidence procedures are not appropriate when used with electronic evidence.
> The SHA -1 checksum method is more advanced and is considered more robust than the MDS method.
> It is impossible to retrieve the data from a file that has been deleted on a computer.
> The best way to obtain documentary evidence in a computer database is to use discovery sampling to find the appropriate records.
> Programs like IBM's i2 Analyst's Notebook and Xanalys Link Explorer perform link analysis.
> Bates numbers are identifying numbers used by attorneys involved in litigation to track all documents.
> Private financial institutions can usually sell confidential customer information.
> Using a computer to access records (data mining) can be a very effective approach for determining if fraud exists because the auditor can look at entire populations.
> Random number tables are ineffective and should not be used when selecting random samples from a population.
> A canceled check typically shows the account number of the person who presented the check, the teller who processed the check, and the sequence number of the transaction.
> Even if photocopies of original documents are allowed to be introduced as evidence in a court of law, they are still considered secondary evidence.
> Concealment is the covering of tracks, obscuring of evidence, and removal of red nags to hide a perpetrator's fraud.
> Investigation should only take place when predication of fraud has first been established.
> Not only are undercover operations both legal and valid, but also inexpensive.
> Surveillance logs should always be prepared before an investigation begins.
> During invigilation, no controls are imposed on any activities.
> Mobile surveillance is usually much more risky than stationary surveillance.
> When people convert stolen cash by entering into financial transactions, such as buying assets, they usually leave tracks that investigators can follow.
> Surveillance is a theft investigation technique that relies on the examination of documents
> Electronic surveillance can be of limited value in the investigation of employee fraud because of concerns regarding employees' privacy rights.
> One advantage of using a vulnerability chart is that it forces investigators to consider all aspects of a fraud
> Now that many companies are storing their data "in the cloud" it is easier to access the electronic data of suspected perpetrators.
> Seizing and searching computers is illegal because it infringes on the rights guaranteed by the Fourth Amendment to the Constitution.
> In determining which investigative method to use, it is most important that investigators focus on the costs of each possible method.
> To get an accurate reading. it is generally agreed that the invigilation period should be at least four days in length.
> Invigilation is a theft act investigative technique that involves close supervision of suspects during an examination period.
> Tailing includes the use of video, e-mail, wiretapping. and access to PCs.
> If possible, when using theft act investigation methods, interviewing the prime suspects should happen last.
> Federal agencies provide better records than state or county agencies for conversion investigations.
> The fraud triangle plus inquiry paradigm is an effective way to understand the various types of fraud investigation methods.
> Unexplained changes are common in financial statements.
> Data-driven fraud detection can pay large dividends and is an effective way to reduce the cost of fraud in any organization.
> Digital analysis using Benford's Law can be performed on databases of any size.
> Understanding the kinds of frauds that can occur is not important when using a data-driven detection method.
> When using Benford's Law, potential suspects are less likely to know you are trying to detect fraud than if you use more direct detection techniques.
> According to Benford's Law, the first digit of natural sets of numbers will begin with a 9 more often than with an 8.
> Data-driven analysis uses the company's database to search for normal relationships between numbers.
> ODBC is the best approach to import because it achieves a direct, rich connection to the source database.
> Studies have found that the most common internal control problem when frauds occur is having a lack of proper authorizations.
> Before financial institutions can sell or disclose confidential customer information, they must provide customers with the opportunity to "opt out" from information sharing.
> Most people who commit fraud feel a perceived financial pressure.
> Because of the nature of fraud, auditors are often in the best position to detect its occurrence.
> Fraud is a crime that is seldom observed.
> A single symptom (red flag) is almost always enough information to identify the type of fraud scheme occurring.
> The z-score calculation is the best way to stratify data.
> Vertical analysis is a useful detection technique because percentages are easily understood.
> Vertical analysis is a more direct method than horizontal analysis in focusing on changes in financial statements from one period to another.
> Balance sheets must be converted to change statements before they can be used in detecting fraud.
> Unusual patterns always indicate the existence of fraud.
> First-time offenders usually exhibit no psychological changes.
> The Gramm-Leach-Bliley Act of 1999 made it more difficult for officials and private citizens to access information from financial institutions.
> As fraud perpetrators become more confident in their fraud schemes, they usually steal and spend increasingly larger amounts.
