Describe what is meant by an organization's theft of cash through larceny.
> 1. 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 creditors' committee pays the investigator.
> 1. Which of the following is not a type of tax fraud? a. Using a false SSN. b. Overstating income. c. Keeping two sets of financial books. d. Claiming a dependent when you do not have one. 2. Which of the following describes a Chapter 13 bankruptcy
> 1. 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. They are asked to give the information. c. The entity receiving this infor
> 1. Phishing is the 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
> 1. Which of the following types of disbursement fraud occurs least frequently? a. Expense tampering. b. Payroll schemes. c. Register disbursement schemes. d. Billing schemes. 2. Which of the following results in the highest loss per case? a. Expens
> 1. Most frauds against organizations are perpetrated by: a. Employees. b. Owners. c. Vendors. d. A collusion of two of the above. 2. What are the three major classes of asset misappropriation? a. Stealing receipts, purchasing fraud, and disbursemen
> 1. 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. e. All of the above. 2. Overstating cash is usu
> 1. Which 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. 2. When accounts payable-related
> 1. The asset turnover ratio measures: a. The average time an asset is used by the company. b. The average useful life of capital assets. c. Sales that are generated with each dollar of the assets. d. Assets that are purchased with each dollar of sale
> For each of the following red flags, identify which fraud exposure the risk falls under: management and directors, relationships with others, organization and industry, or financial results and operating characteristics. 1. The personal worth of directo
> 1. Which 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
> 1. The most common account(s) manipulated when perpetrating financial statement fraud are: a. Expenses. b. Inventory. c. Revenues. d. Accounts Payable. 2. Why might a company want to understate net income? a. To increase profits. b. To increase s
> 1. 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. 2. Interviews should not be conducted with: a. Suspects. b. Co-workers. c. Clients. d. Interv
> 1. 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 organizatio
> 1. Financial statement fraud is usually committed by: a. Executives. b. Managers. c. Stockholders. d. Outsiders. e. Both a and b. 2. Which officer in a company is most likely to be the perpetrator of financial statement fraud? a. Chief financial o
> 1.Which of the following is the typical sequence of reactions to a crisis? a. Anger, denial, rationalization, depression, acceptance. b. Rationalization, denial, anger, depression, acceptance. c. Denial, anger, rationalization, depression, acceptance.
> 1. 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. 2. In liability fraud, liabil
> 1. 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
> 1. 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. 2. Most court cases are decided in state courts, except when: a. Fed
> What is an affidavit of proposed investigator?
> Compare and contrast financial statement fraud with embezzlement and misappropriation, especially with respect to who usually commits the fraud. Also contrast the different kinds of fraud with respect to who benefits from the fraud.
> What is a court-appointed or panel trustee?
> Why is fraud so prevalent in bankruptcy and divorce cases?
> Why are the elderly and/or uneducated so susceptible to fraud?
> How does consumer fraud affect the economies of entire countries?
> What is the difference between a fraudulent multilevel marketing organization and a legitimate multilevel marketing organization?
> What is a Nigerian money offer?
> What are some examples of foreign advance-fee scams?
> What are some proactive steps that consumers can take to minimize their risk to identity theft?
> What are some methods perpetrators use to steal a person's identity?
> What is identity theft?
> ABC Company manufactures and sells software packages to small businesses. The company has enjoyed great success since it began business in 1998. Last year, the firm doubled its revenues, and its management is now looking closely at going public by making
> Why are theft of cash through larceny schemes easier to detect than skimming schemes?
> What are the four types of corruption?
> What are the six kinds of fraudulent disbursements?
> When does a conflict of interest occur? Give an example.
> After working out at the gym, you notice that your car has been broken into and your wallet has been stolen. What should you do?
> While consumer fraud often affects individual people directly, in what ways does consumer fraud affect everyone?
> How does the expression "If it sounds too good to be true, it probably is" relate to consumer fraud?
> What are investment scams?
> Why is it important to study consumer fraud?
> How do executives illegally loot their companies to receive large financial benefits?
> After Enron, WorldCom, and other major corporate scandals that rocked America in the recent past, it seemed that nothing would surprise investors or regulators. However, almost everyone was shocked by revelations that as many as 20 percent of all public
> What are expense fraud schemes?
> What is meant by a billing scheme?
> What is a register disbursement scheme?
> What is meant by check tampering?
> How does the ACFE categorize fraudulent disbursements?
> Describe what is meant by theft of cash through skimming.
> Briefly describe how the use of databases could help in detecting kickback fraud schemes.
> What is meant by the term "bribery"?
> What is meant by the term "corruption"?
> How can the data-driven fraud detection approach be used to detect e-business fraud? What data sources can be used to discover potential frauds?
> What are payroll disbursement fraud schemes?
> What are the three types of fraud against organizations that employees, vendors, and customers use to steal an organization's assets?
> Is cash an asset that is frequently overstated when committing financial statement fraud? Why or why not?
> Explain why improper capitalization of amounts spent could result in financial statement fraud and overstatement of assets.
> What are some documentary symptoms of contingent liabilities that should be recorded?
> If a contingent liability is only a possible liability, why might not disclosing contingent liabilities constitute financial statement fraud?
> What is the difference between unearned revenue and earned revenue?
> Why might liabilities be understated if proper adjusting entries are not made at the end of an accounting period?
> Explain what is meant by "cutoff problems" as they relate to accounts payable.
> List the four methods used to perform analytical analyses to search for fmancial statement fraud symptoms. Give an example of each method as it applies to searching for symptoms related to underreporting of liabilities.
> How has the Internet changed your day-to-day life? What security precautions do you take each time you use the Internet?
> 1. A request for confession asks the opposing party to admit designated facts relevant to litigation. 2. The parties in a civil case may negotiate a settlement during any stage of litigation. 3. If responses to interrogatories are not given in a timely
> What is norming or calibrating?
> What is the purpose of assessment questions?
> What is an interview?
> What are the three different categories into which disclosure frauds can be categorized?
> If you were to compare two companies in the same industry and found that one company had $100 of fixed assets for every $1 of sales while the other had $200 of fixed assets for every $1 of sales. what would be a possible explanation for the difference?
> What are the four kinds of analysis that can be used in searching for analytical fraud symptoms?
> If all financial statement amounts are presented appropriately, could financial statement fraud still be occurring?
> ln what ways could financial statement fraud result from a merger?
> Why is understatement of liability fraud difficult to discover?
> What is the effect on net income of overstating ending inventory?
> 1. Segregation of duties is an important control in preventing e-business fraud. 2. Digital signatures use human features to create secure access controls. 3. Biometrics is a form of authorization control. 4. It is often easier to analyze e-business
> What is the effect on net income of not recording sales returns?
> Why do you suspect that revenue-related financial statement fraud schemes are most common and inventory-related fraud schemes are next most common?
> What are common-size financial statements?
> What are some of the ways to proactively search for inventory-related financial statement fraud schemes?
> What are some of the most common inventory related financial statement fraud schemes?
> Why is it important to follow up on revenue related fraud symptoms?
> What are some possible ways to proactively search for revenue-related financial statement fraud schemes?
> When looking for financial statement fraud, why is it important to analyze the relationship between a company and its auditors?
> Why must relationships with others be examined when searching for financial statement fraud exposures?
> Why must members of management and the board of directors be examined when searching for financial statement fraud exposures?
> 1. Fraud risks are higher when the entity with which you are transacting business can't be seen. 2. Data theft is a bigger problem in e-business transactions than money theft. 3. Sniffing changes e-mail headers or IP addresses. 4. Falsified identit
> What are some of the ways that financial statement fraud exposures can be identified?
> How can comparing financial statement amounts with actual assets they are supposed to represent help determine if fraud is present?
> What are some common revenue-related financial statement fraud schemes?
> What are some common motivations of financial statement fraud?
> How can an active audit committee help to deter financial statement fraud in an organization?
> What are common ways in which financial statement frauds are concealed?
> Why are CEOs the most frequent perpetrators of financial statement fraud?
> Who usually commits financial statement fraud?
> What is financial statement fraud?
> Why are financial statements important to the effective operation of capital markets?
> 1. The purpose of civil laws is to "right a wrong” or send someone to jail or have them pay fines, whereas the purpose of criminal laws is to seek monetary remedies or recover stolen funds. 2. The retention of a fraud investigator in a bankruptcy case
> The chapter identifies nine factors that Jed to the "perfect fraud storm." Explain how these factors helped create and foster the ethical compromises that occurred between 2000 and 2002.
> What are the four different exposure areas that must be examined while detecting financial statement fraud?
