Identify the two basic bribery schemes.

Selected Answer:

Kickbacks and bid-rigging

Theft and skimming

Answers:

Kickbacks and bid-rigging

Economic extortion and illegal gratuity
Lapping and extortion

Question 2
1 out of 1 points

A fraud perpetrator uses the float time between banks to give the
impression that he had money in his accounts. Which crime is he
committing?
Selected Answer:

Kiting
Floating

Answers:

Strip
Spinning
Kiting

Question 3
0 out of 1 points

Which department or group accounted for the maximum

percentage of fraud incidents according to the study conducted by
ACFE in 2010?
Selected Answer:
Answers:

sales
accounting
human resources
top management

Question 4
1 out of 1 points

Which of the following is NOT a primary control procedure to

minimize the occurrence of fraud?

Selected Answer:

Internal audit department

Dual custody

Answers:

Systems of authorization
Internal audit department
Documents and records

Question 5
1 out of 1 points

What is the strongest factor in deterring future fraud activity?

Selected Answer:

Legal prosecution.
Answers:

Legal prosecution.
Sanctions.
Termination.
Counseling.

Question 6
1 out of 1 points

Theft is easier to detect than skimming because:

Selected
Answer:

theft involves stealing cash after it has already been

recorded in the company's accounting system.

Answers:

theft involves stealing cash after it has already been

recorded in the company's accounting system.
theft involves fraudulent disbursements of cash, while
skimming involves fraudulent receipts of cash.
theft involves stealing cash before it has been recorded
in the company's accounting system.
theft can take place in any circumstance in which an
employee has access to cash.
Answer
Feedback:

Correct

Question 7
1 out of 1 points

Which of the following is the best example of theft of cash through

skimming?

Selected
Answer:

Answers:

Understating sales by recording larger-than reality

sales discounts.
Preparing fraudulent checks.
Understating sales by recording larger-than reality
sales discounts.
Setting up dummy companies.
Stealing cash after it has already been recorded.

Question 8
0 out of 1 points

All of the following are possible ways to commit fraud by using a

payroll scheme EXCEPT:
Selected Answer:
Answers:

overstating expenses.
falsifying hours worked.
creating ghost employees.
producing false worker compensation claim.

Question 9
1 out of 1 points

An employee who has the responsibilities of both writing cheques

and making bank deposits would have ____.
Selected Answer:

Perceived opportunity
Answers:

Financial pressure
Perceived opportunity
Rationalization
Very sore hands

Question 10
1 out of 1 points

According to the ACFE study described in the text, which fraudulent

disbursement scheme occurs most frequently?
Selected Answer:

Billing scheme
Answers:

Billing scheme
Wire transfers
Payroll scheme
Register disbursements

Question 11
1 out of 1 points

Orders placed for buying shares of a mutual fund any time up to

4:00 p.m. are priced at that day's NAV, and orders placed after 4:01
p.m. are priced at the next day's NAV. What is this practice known
as?
Selected Answer:

Forward pricing
Answers:

Forward pricing
Late trading
Price arbitrage
Price dealing

Question 12
1 out of 1 points

Claiming personal travel as a business expense, a personal lunch

as a business lunch, altering a receipt to reflect a higher amount
than was actually paid, or submitting fictitious receipt is an
example of ________.
Selected Answer:

an expense reimbursement scheme

Answers:

a billing scheme
a payroll disbursement scheme
a register disbursement scheme
an expense reimbursement scheme

Question 13
1 out of 1 points

Modeling and labeling are sub-components of which control

structure component?
Selected Answer:

Control environment
Answers:

Control environment
Accounting system
Control procedure
Review

Question 14
1 out of 1 points

Of all payroll fraud schemes, ______ schemes tend to generate the

largest losses.
Selected Answer:

ghost employee
commission

Answers:

falsified hours and salary

ghost employee
false worker compensation

Question 15
1 out of 1 points

The fraud triangle includes all of the following EXCEPT:

Selected Answer:

Validation
Answers:

Validation
Perceived opportunity
Rationalization
Perceived pressure

Question 16
1 out of 1 points

Identify the statement that does NOT represent one of the four
types of corruption.
Selected
Answer:

Answers:

Overbilling the company for travel and other related

business expenses, such as business lunches, hotel bills,
and air travel.
Offering, giving, receiving, or soliciting anything of value
in order to influence an official act.
Overbilling the company for travel and other related

business expenses, such as business lunches, hotel bills,

and air travel.
The employee demands a payment from a vendor in
order to make a decision in that vendor's favor.
The exertion of an employee's influence to the
detriment of his or her company.

Question 17
1 out of 1 points

According to the ACFE study, ________ comprises by far the highest

percentage of asset misappropriation.
Selected Answer:

fraudulent disbursement
theft

Answers:

skimming
delayed payment recognition
fraudulent disbursement

Question 18
1 out of 1 points

Which of the following examples is NOT a billing scheme?

Selected
Answer:

Answers:

Mark submits a receipt of his cab fare for

reimbursement, which includes an extra $10.
Mary purchases a new laptop for her brother-in-law with
company's funds.
Mark submits a receipt of his cab fare for
reimbursement, which includes an extra $10.
Joven double pays a vendor for the purchase of
inventory and then pockets the second payment when it
is returned.
Harry submits invoices in the name of the dummy
company and collects the amount.

Question 19
1 out of 1 points

An ice cream store cashier sells two-scoop ice cream cones to

customers and enters the sales as single-scoop sales, while
keeping the difference for himself. Which fraud is being committed
here?

Selected Answer:

Skimming
Answers:

Theft
Disbursement
Skimming
Illegal gratuities

Question 20
1 out of 1 points

When management fraud occurs, companies usually:

Selected Answer:

overstate assets and net income.

Answers:

overstate assets and net income.

understate assets and net income.
overstate assets and understate net income.
understate assets and overstate net income.

Question 21
0 out of 1 points

Thefts of inventory are divided into two groups. Identify them.

Selected Answer:
Answers:

Corruption and bribery

Expense scheme and skimming
Economic extortion and illegal gratuities
Larceny and misuse

Question 22
1 out of 1 points

Many individuals, when persuaded by a trusted friend to participate

in fraud, will rationalize the actions as being justifiable. Which type
of power is being employed in such situations?
Selected Answer:

Referent power
Answers:

Referent power
Legitimate power

Coercive power
Reward power
Horse power

Question 23
1 out of 1 points

Most fraud perpetrators have profiles that look like:

Selected Answer:

Those of other honest people

Answers:

Those of other honest people

Those with criminal records
Those who are uneducated
Those who use alcohol and drugs

Question 24
1 out of 1 points

What is the most important element in a control environment?

Selected Answer:

Management's role and example

Answers:

Management's communication
Management's role and example
The hiring process
The internal audit department

Question 25
1 out of 1 points

Financial statement fraud is typically committed by:

Selected Answer:

Top management
Answers:

Employees with access to company assets

Top management
Customers
Vendors

Question 26
1 out of 1 points

Which of the following is NOT one of the key elements common to

all frauds?
Selected Answer:

Perceived inequality
Answers:

Perceived pressure
Perceived inequality
Perceived opportunity
Rationalization

Question 27
0 out of 1 points

_____ is the ability of the perpetrator to relate to the potential coconspirator.

Answers:

Expert power
Legitimate power
Referent power
Reward power