Test bank for fraud examination 4th edition

To be successful, plaintiffs in civil cases must prove their case by which of the following1. Financial statement fraud Civil claims begin when one party files a complaint against anothe

Test Bank for Fraud Examination 4th Edition

The Anti-Kickback Act of 1986 intends to prevent:

1. bribery, by punishing perpetrators with up to 15 years in prison

2 any scheme to defraud federally insured financial institutions

3 the giving or receiving of any thing of value by a subcontractor to a prime contractor

4 individuals from using insider information to purchase or sell a company`s securities

Perpetrators of some fraud schemes often target conspiracy theorists,

promising access to the “secret” investments used by the Rothschilds or Saudi royalty and offer triple-digit returns Such schemes are best described as:

1. Affinity frauds

2 Ponzi schemes

3 Franchise frauds

4 Prime bank schemes

Who are the primary victims of financial statement fraud?

1. Middle management

2 Organizations that buy goods or services

3 Analysts

4 Stockholders

Generally applicants for CFE certification should have a minimum of a

bachelor’s degree or equivalent from an institution of higher learning

Alternatively if applicants do not have a bachelor’s degree, they may

substitute months of fraud-related professional experience for each year of academic study

1. 24

2 18

3 15

4 12

5 9

The ACFE includes three major categories of occupational fraud EXCEPT:

1. asset misappropriations

2 corruption

3 fraudulent statements

4 pension fraud

What is the most cost-effective way to minimize the cost of fraud?

1. Prevention

2 Detection

3 Investigation

4 Prosecution

Fraud in companies such as WorldCom, Enron, Waste Management, Sunbeam, Rite-Aid, Phar-Mor, Parmalat, and ZZZZBest are examples of:

1. Customer fraud

2 Investment scams

3 Vendor fraud

4 Management fraud

Which of the following statements is true?

1. Fraud usually results from unintentional errors

2 Fraud is more violent and traumatic than robbery

3 Fraud always involves deception, confidence and trickery

4 Losses from fraud are less than losses from robbery

To be successful, plaintiffs in civil cases must prove their case by which of the following?

1. Preponderance of evidence

2 Beyond a reasonable doubt

3 To a degree of reasonable mitigation

4 To the standard of prima facie

Which of the following is NOT an example of a fraud-fighting career?

1. Working for the criminal investigation division of the IRS

2 Serving as an expert witness

3 Maintaining the security of public records

4 Defending an organization being sued in a civil case

Which of the following observations concerning occupational fraud is NOT true?

1. It is clandestine

2 It is committed for the purpose of direct or indirect financial benefit to the employee

3 It always involves two or more employees

4 It costs the employing organization assets, revenues, or reserves

Which of the following is NOT one of the major types of fraud classification schemes?

1. Employee embezzlement

2 Government fraud

3 Investment scams

4 Customer fraud

Which of the following frauds is usually the most expensive?

1. Vendor fraud

2 Customer fraud

3 Occupational fraud

4 Financial statement fraud

Civil claims begin when one party files a complaint against another, usually for the purpose of:

1. penalty

2 imprisonment

3 proving the other party wrong

4 financial restitution

Employee embezzlement can be direct or indirect Indirect fraud occurs when:

1. an employee uses company assets to run his/her private business

2 employees establish dummy companies and have their employers pay for goods that are not actually delivered

3 an employee receives a kickback from a vendor

4 an employee steals company cash, inventory, tools, or other assets

Telemarketing fraud usually falls into this category

1. Investment scams

2 Management fraud

3 Vendor fraud

4 Embezzlement

The word "con," which means to deceive, comes from the word:

1. Contract

2 Conserve

3 Confuse

4 Confidence

In fraud prosecution cases, matter consists of the underlying data and all corroborating information available

1. evidential

2 remedial

3 supplement

4 elementary

The study conducted by the Association of Certified Fraud Examiners in 2008 estimated that U.S organizations lose _ percent of their annual revenues

to fraud

1. 8

2 7

3 23

4 17

A company was the victim of several frauds that totaled approximately $10 million in one year With a profit margin of 10 percent, and assuming that the company’s product sold for $1,000 per unit, how many additional units must the company sell to compensate for the fraud losses?

1. 1 million

2 100 million

3 100,000

4 10,000

Given below are the profit margins and fraud related losses of four

economies Which economy will have to generate the maximum dollar amount

of additional revenues to recover the loss to aggregate income? Economy A 10% $225 million Economy B 10% $150 million Economy C 5% $100 million Economy D 2% $ 50 million

1. Economy A

2 Economy D

3 Economy C

4 Economy B

The GDP in the economy of Ponziland was $5 billion in the year prior to the frauds (year 1) The economy were growing at 4 percent Frauds during the year reduce aggregate income by $200 million During the year, the economy has:

1. shrunk by 1 percent

2 grown by only 1 percent

3 remained flat

4 grown by 4 percent

What is the single most critical element for a fraud to be successful?

1. Criminal intent

2 Confidence

3 Greed

4 Compulsion

Fraud statistics come from all of the following sources EXCEPT:

1. Government agencies

2 Researchers

3 Insurance Companies

4 Victims

5 Fraud perpetrator

One way that criminal law differs from civil law is that it:

1. provides remedies for violations of private rights

2 must yield a unanimous verdict

3 can have a jury of fewer than 12 persons

4 allows for various claims in one action

Which of the following is NOT an element of a Ponzi scheme?

1. Gaining other`s confidence

2 Promising abnormally high returns

3 Collected money is invested in government bonds

4 Investment principle is partially used to make payments to previous

investors

The following are all elements of Title 26, U.S Code Section 7201

EXCEPT:

1. not reporting bribe income may be grounds for being charged with tax evasion

2 filing income tax that excludes income from fraud may be considered an improper tax filing

3 bribes may be deducted as legitimate business expenses

4 failure to report income from fraud may be grounds for being charged with tax evasion

Which one of the following is NOT a characteristic of a criminal

proceeding?

1. Deals with offenses against society

2 Consequences include restitution and damage payments

3 Jury of 12 individuals

4 Only one claim may be heard at a time

Management fraud is often referred to as:

1. stockholder fraud

2 financial statement fraud

3 affinity fraud

4 investment fraud

What is required to prove fraud, as opposed to negligence?

1. Gross error

2 Intent

3 Preponderance of the evidence

4 Confession from the perpetrator

Which of the following is the most common type of occupational fraud?

1. Financial statement fraud

2 Mail fraud

3 Investment fraud

4 Employee embezzlement

Which of the following is NOT a characteristic of management fraud?

1. Top management deception

2 Manipulation of financial statements

3 Kickbacks or bribes

4 Pressure to earn year-end bonuses

Customer fraud includes all of the following EXCEPT:

1. Get something for nothing

2 Do not pay for goods purchased

3 Fraud perpetrated through collusion between buyers and vendors

4 Deceive organization into giving them something they should not

Which of the following is a common example of vendor fraud?

1. Fraud perpetrated through collusion between buyers and vendors

2 Fraud perpetrated by buyers acting alone

3 The perpetrator physically removes the inventory from the business

premises

4 A fraud perpetrated through an unintentional mistake

Government agencies such as the FBI, FDIC, IRS, or various health agencies publish fraud statistics from time to time Which of the following observations concerning such statistics is true?

1. Generally, their statistics are complete

2 Such information is rarely used

3 They provide only those statistics related to their jurisdiction

4 They usually provide a total picture in the areas for which they have

responsibility

Which legal code makes the bribing of public officials illegal?

1. Title 18, U.S Code Section 201

2 Title 41, U.S Code Section 51 to 58

3 Title 18, U.S Code Section 1341

4 Title 18, U.S Code Section 1344

Fraud has a direct dollar for dollar impact on a company's:

1. Revenues

2 Net income

3 Profit margin

4 Stock price

Which of the following is NOT a primary reason for increased size and number

of frauds?

1. The advent of computers

2 Complex accounting systems

3 Increased centralization of businesses

4 The Internet

Which among the following frauds is most likely to be a civil charge?

1. Racketeering

2 Mail fraud

3 Defamation

4 Perjury

The elements of fraud include all of the following EXCEPT:

1. a material point is misrepresented

2 the misrepresentation is intentional

3 the misrepresentation is known to the victim

4 the victim must sustain damages

The burden of proof in a criminal case must:

1. be beyond a reasonable doubt

2 be the preponderance of knowledge and power

3 be preponderance of evidence

4 lie with the defendant

Which of the following statements about criminal and civil cases is

correct?

1. The purpose of a criminal case is `to right a wrong`, the purpose of civil case

is to obtain a remedy

2 Jury must have 12 people in civil cases but in criminal cases may consist of fewer than 12 persons

3 Both criminal cases and civil cases require a fraud perpetrator to go to jail

4 Only one claim at a time in civil cases however in criminal cases, various claims may be joined in one action

How is the confidence element established in a Ponzi scheme?

1. By investing in prime bonds

2 By issuing notarized certificates

3 By paying returns to initial investors

4 By returning money to all investors

The most common fraud committed on behalf of an organization is:

1. Vendor fraud

2 Employee embezzlement

3 Fraudulent financial reporting

4 Customer fraud

A company is a victim of a $414 million fraud At that time its profit margin is 10% How much additional revenue should the company generate in order to recover the effect on net income?

1. $41.4 million

2 $414 million

3 $4.14 billion

4 $41.4 billion

Scammers often use their victim’s ethnic identity to gain their trust and then steal their life savings This is an example of:

1. vendor fraud

2 affinity fraud

3 embezzlement

4 occupational fraud

ne way that criminal law differs from civil law is that it:

1. provides remedies for violations of private rights

2 must yield a unanimous verdict

3 can have a jury of fewer than 12 persons

4 allows for various claims in one action

Which of the following is NOT an element of a Ponzi scheme?

1. Gaining other`s confidence

2 Promising abnormally high returns

3 Collected money is invested in government bonds

4 Investment principle is partially used to make payments to previous

investors

The following are all elements of Title 26, U.S Code Section 7201

EXCEPT:

1. not reporting bribe income may be grounds for being charged with tax

evasion

2 filing income tax that excludes income from fraud may be considered an improper tax filing

3 bribes may be deducted as legitimate business expenses

4 failure to report income from fraud may be grounds for being charged with tax evasion

Which one of the following is NOT a characteristic of a criminal

proceeding?

1. Deals with offenses against society

2 Consequences include restitution and damage payments

3 Jury of 12 individuals

4 Only one claim may be heard at a time

Management fraud is often referred to as:

1. stockholder fraud

2 financial statement fraud

3 affinity fraud

4 investment fraud

What is required to prove fraud, as opposed to negligence?

1. Gross error

2 Intent

3 Preponderance of the evidence

4 Confession from the perpetrator

Which of the following is the most common type of occupational fraud?

1. Financial statement fraud

2 Mail fraud

3 Investment fraud

4 Employee embezzlement

Which of the following is NOT a characteristic of management fraud?

1. Top management deception

2 Manipulation of financial statements

3 Kickbacks or bribes

4 Pressure to earn year-end bonuses

Customer fraud includes all of the following EXCEPT:

1. Get something for nothing

2 Do not pay for goods purchased

3 Fraud perpetrated through collusion between buyers and vendors

4 Deceive organization into giving them something they should not

Which of the following is a common example of vendor fraud?

1. Fraud perpetrated through collusion between buyers and vendors

2 Fraud perpetrated by buyers acting alone

3 The perpetrator physically removes the inventory from the business premises

4 A fraud perpetrated through an unintentional mistake

Government agencies such as the FBI, FDIC, IRS, or various health agencies publish fraud statistics from time to time Which of the following observations concerning such statistics is true?

1. Generally, their statistics are complete

2 Such information is rarely used

3 They provide only those statistics related to their jurisdiction

4 They usually provide a total picture in the areas for which they have

responsibility

Which legal code makes the bribing of public officials illegal?

1. Title 18, U.S Code Section 201

2 Title 41, U.S Code Section 51 to 58

3 Title 18, U.S Code Section 1341

4 Title 18, U.S Code Section 1344

Fraud has a direct dollar for dollar impact on a company's:

1. Revenues

2 Net income

3 Profit margin

4 Stock price

Which of the following is NOT a primary reason for increased size and number

of frauds?

1. The advent of computers

2 Complex accounting systems

3 Increased centralization of businesses

4 The Internet

Which among the following frauds is most likely to be a civil charge?

1. Racketeering

2 Mail fraud

3 Defamation

4 Perjury

The elements of fraud include all of the following EXCEPT:

1. a material point is misrepresented

2 the misrepresentation is intentional

3 the misrepresentation is known to the victim

4 the victim must sustain damages

The burden of proof in a criminal case must:

1. be beyond a reasonable doubt

2 be the preponderance of knowledge and power

3 be preponderance of evidence

4 lie with the defendant

Which of the following statements about criminal and civil cases is

correct?

1. The purpose of a criminal case is `to right a wrong`, the purpose of civil case

is to obtain a remedy

2 Jury must have 12 people in civil cases but in criminal cases may consist of fewer than 12 persons

3 Both criminal cases and civil cases require a fraud perpetrator to go to jail.

4 Only one claim at a time in civil cases however in criminal cases, various claims may be joined in one action

How is the confidence element established in a Ponzi scheme?

1. By investing in prime bonds

2 By issuing notarized certificates

3 By paying returns to initial investors

4 By returning money to all investors

The most common fraud committed on behalf of an organization is:

1. Vendor fraud

2 Employee embezzlement

3 Fraudulent financial reporting

4 Customer fraud

A company is a victim of a $414 million fraud At that time its profit margin is 10% How much additional revenue should the company generate in order to recover the effect on net income?

1. $41.4 million

2 $414 million

3 $4.14 billion

4 $41.4 billion

Scammers often use their victim’s ethnic identity to gain their trust and then steal their life savings This is an example of:

1. vendor fraud