Recognizing The Symptoms Of Fraud

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Question 1
Free
Multiple Choice

Of the elements of fraud, which is usually least likely to be detected by auditors?

Choose correct answer/s
A

Theft act

B

Concealment

C

Conversion

D

Personal pressures

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Question 2
Free
Multiple Choice

Auditors usually detect fraud in which element of the crime?

Choose correct answer/s
A

Theft act

B

Concealment

C

Conversion

D

Rationalization

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Question 3
Free
Multiple Choice

It is discovered that a bank does not require two signatures on cashier's checks exceeding $500,000. This is an example of:

Choose correct answer/s
A

Analytical anomalies.

B

Accounting anomalies.

C

Faulty journal entries.

D

Internal control weaknesses.

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Question 4
Free
Multiple Choice

One of the most effective ways to prevent fraud is to implement a system of independent checks. Which of the following is not a common independent check?

Choose correct answer/s
A

Employee Transfers

B

Audits

C

Mandatory vacations

D

Surveillance

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Question 5
Free
Multiple Choice

Which of the following is an analytical anomaly that could be related to fraud?

Choose correct answer/s
A

Journal entries that lack documentation

B

Late charges that are incurred on Accounts Payable

C

Increased scrap

D

The fraud perpetrator increases his smoking habit

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Question 6
Multiple Choice

Which type of account would most likely be used to conceal fraud?

Choose correct answer/s
A
Common Stock
B
Revenues
C
Liabilities
D
Expenses
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Question 7
Multiple Choice

Increased scrap is an example of

Choose correct answer/s
A
An accounting anomaly
B
An internal control weakness
C
An analytical anomaly
D
None of the above
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Question 8
Multiple Choice

Upon committing fraud, what do most people do with excess funds?

Choose correct answer/s
A
Put them in savings
B
Spend them on extravagant items
C
Donate them to charities
D
Slowly give them back to the company
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Question 9
Multiple Choice

Which one of the following fraud elements does not belong with the other three?

Choose correct answer/s
A
Theft
B
Rationalization
C
Conversion
D
Concealment
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Question 10
Multiple Choice

A faulty journal entry is an example of which kind of fraud symptom?

Choose correct answer/s
A
Accounting anomalies
B
Internal control weaknesses
C
Unusual behaviors
D
Analytical anomalies
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Question 11
Multiple Choice

Which of the following entries may indicate fraud except:

Choose correct answer/s
A
Journal entries made near the end of an accounting period
B
Journal entries made without documentary support
C
Journal entries that do not balance
D
All of the above are frequently indicative of fraud
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Question 12
Multiple Choice

Common accounting anomalies involve problems with

Choose correct answer/s
A
Faulty journal entries
B
Source documents
C
Both A & B
D
Neither A nor B
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Question 13
Multiple Choice

Embezzlers who manipulate accounting records to conceal their fraud (or theft of assets) most often ______________ .

Choose correct answer/s
A
"Balance" the accounting equation by reducing equity.
B
"Balance" the accounting equation by reducing revenues.
C
"Balance" the accounting equation by reducing liabilities.
D
"Balance" the accounting equation by increasing expenses.
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Question 14
Multiple Choice

Inaccuracies in ledgers are what type of fraud symptom?

Choose correct answer/s
A
Internal control weaknesses
B
Analytical anomalies
C
Accounting anomalies
D
Unusual behavior
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Question 15
Multiple Choice

Who is in the best position to detect employee fraud?

Choose correct answer/s
A
Auditors
B
Senior Management
C
Co-workers
D
All of the above
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Question 16
Multiple Choice

Smart embezzlers realize that when making false journal entries, reducing _____________ is not a good concealment method?

Choose correct answer/s
A
Time spent at work
B
Liabilities
C
Management interaction
D
Time spent making a journal entry
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Question 17
Multiple Choice

What do fraud perpetrators rarely do with the money they stole?

Choose correct answer/s
A
Use the money to buy luxury items
B
Use the money to improve their lifestyle
C
Save the money in the bank
D
None of above
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Question 18
Multiple Choice

Which of the following is an accounting anomaly?

Choose correct answer/s
A
Missing documents
B
Excess purchases
C
Too many debit or credit memos
D
Cash Shortages
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Question 19
Multiple Choice

Which of the following is in the best position to detect fraud?

Choose correct answer/s
A
auditors
B
stock market annalists
C
management and employees
D
investors
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Question 20
Multiple Choice

Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by ________ and __________ ?

Choose correct answer/s
A
Guilt and fear.
B
Stress and insomnia.
C
Confidence and rationalization.
D
Defensiveness and guilt.
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