Question 1

After committing fraud,an individual often exhibits unusual and recognizable behavior patterns to cope with the stress.Perpetrators experience these behavioral signals in a particular sequence.Identify it.

Accepted Answer

A)  Guilt - Stress - Fear - Behavior changes
B)  Fear - Guilt - Stress - Behavior changes
C)  Fear - Guilt - Behavior changes - Stress
D)  Guilt - Fear - Stress - Behavior changesE) B) and D)
F) All of the above

Question 2

Which of the following is an example of accounting anomaly fraud symptom?

Accepted Answer

A)  Missing documents
B)  Excess purchases
C)  Too many debit or credit memos
D)  Inadequate accounting systemE) A) and B)
F) A) and D)

Question 3

Which of the following usually motivates embezzlers to indulge in a fraudulent activity?

Accepted Answer

A)  Pursuit of immediate gratification.
B)  Safeguard their future.
C)  Cover expenses required to live.
D)  Protection against uncertainties.E) C) and D)
F) A) and C)

Question 4

Inaccuracies in ledgers represent which type of fraud symptom?

Accepted Answer

A)  Internal control weaknesses
B)  Analytical anomalies
C)  Accounting anomalies
D)  Financial statement weaknessesE) None of the above
F) B) and C)

Question 5

Increased scrap,excessive purchases,physical abnormalities,etc.are all examples of:

Accepted Answer

A)  accounting anomalies.
B)  external control weaknesses.
C)  analytical anomalies.
D)  unusual behavior.E) All of the above
F) B) and D)

Question 6

How does a smart embezzler manipulate accounting records to conceal fraud?

Accepted Answer

A)  By increasing assets.
B)  By manipulating stock accounts.
C)  By manipulating dividends.
D)  By increasing expenses.E) A) and C)
F) A) and D)

Question 7

Which of the following is NOT an analytical fraud symptom?

Accepted Answer

A)  Consistent cash shortages
B)  Overriding of existing controls
C)  Excess purchases
D)  Unreasonably high expensesE) A) and B)
F) All of the above

Question 8

Recording an expense to conceal fraud involves making a fictitious journal entry.A faulty journal entry is an example of which fraud symptom?

Accepted Answer

A)  Accounting anomaly
B)  Internal control weakness
C)  Unusual behavior
D)  Analytical anomalyE) A) and C)
F) All of the above

Question 9

An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.The above statement symbolizes which fraud symptom?

Accepted Answer

A)  Accounting anomaly
B)  Internal control weakness
C)  Analytical anomaly
D)  Unusual behaviorE) None of the above
F) A) and B)

Question 10

______ fraud symptoms are procedures or relationships that are unusual or that do not make sense.

Accepted Answer

A)  Analytical
B)  Accounting
C)  Internal control
D)  EnvironmentalE) All of the above
F) None of the above

Question 11

​Which of the following possible actions may discourage an employee to report suspected fraudulent activities?

Accepted Answer

A)  ​Management promises no prosecution of the individual if guilty.
B)  ​Corporate security's number is provided.
C)  ​The number of the internal auditor is provided.
D)  ​Corporate management stresses that any information provided will be kept confidential.E) A) and B)
F) B) and C)

Question 12

An employee decides to steal cash from his/her employer.What would be the best way to conceal such a fraud?

Accepted Answer

A)  Record the stolen cash as an expense.
B)  Writing down accounts payable for a supplier.
C)  Increasing accounts receivable from a customer.
D)  Writing down as dividend paid to shareholders.E) B) and C)
F) A) and D)

Question 13

Lifestyle changes of fraud perpetrators are related to which of the following fraud elements?

Accepted Answer

A)  Theft act
B)  Concealment
C)  Conversion
D)  ConfessionE) A) and D)
F) None of the above

Question 14

Which of the following is NOT a fraud symptom related to internal control weaknesses?

Accepted Answer

A)  Lack of segregation of duties
B)  Lack of physical safeguards
C)  Inadequate accounting system
D)  Lack of proper authorization
E)  Excessive turnover of executivesF) A) and C)
G) A) and D)

Question 15

​Which of the following is a true statement?

Accepted Answer

A)  ​Lifestyle changes are often the easiest fraud symptoms to detect.
B)  ​Lifestyle changes are helpful in detecting fraud on behalf of a corporation.
C)  ​Fraud is indicated when an employee sells a large number of shares of stock he/she owns.
D)  ​Evidence of an employee paying off large debt can be verified, but it is costly to do so.E) A) and B)
F) All of the above

Question 16

Which of the following is a highly suspicious financial statement relationship?

Accepted Answer

A)  Increased revenues with decreased inventory.
B)  Decreased production with decreased scrap.
C)  Increased revenues with increased receivables
D)  Decreased cost per unit with increased level of outputE) C) and D)
F) None of the above

Question 17

​Which of the following acts by management could discourage someone from reporting an observed act of fraud?

Accepted Answer

A)  ​providing clear instructions of who to contact
B)  ​providing assurance of anonymity
C)  ​providing clear instructions on how to convey the information
D)  ​providing a clear list of possible consequencesE) B) and C)
F) None of the above

Question 18

What does the following journal entry indicate? Legal Expense..................2,900
Cash...............................2,900
​

Accepted Answer

A)  $2,900 cash is due to an attorney.
B)  A sum of $2,900 was received from attorney in advance.
C)  $2,900 cash is due from an attorney.
D)  An attorney was paid $2,900 in cash.E) A) and B)
F) All of the above

Question 19

Which of the following is a control problem related to segregation of duties?

Accepted Answer

A)  Julie writes expense checks and Mark collects cash from customers.
B)  Bob order office supplies and deposits the company's checks.
C)  Steve records receivables and writes off bad debts.
D)  Rebecca records journal entries and orders lunch.E) All of the above
F) B) and C)

Question 20

Which of the following fraud symptoms is often the easiest to detect?

Accepted Answer

A)  Analytical anomalies
B)  Internal control weaknesses
C)  Accounting anomalies
D)  Lifestyle changesE) A) and B)
F) A) and D)

Exam 5: Recognizing the Symptoms of Fraud

Inaccuracies in ledgers represent which type of fraud symptom?

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Which of the following is a control problem related to segregation of duties?

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Which of the following is NOT a fraud symptom related to internal control weaknesses?

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​Which of the following possible actions may discourage an employee to report suspected fraudulent activities?

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After committing fraud,an individual often exhibits unusual and recognizable behavior patterns to cope with the stress.Perpetrators experience these behavioral signals in a particular sequence.Identify it.

Correct AnswerverifiedShow Answer

​Which of the following acts by management could discourage someone from reporting an observed act of fraud?

Correct AnswerverifiedShow Answer

Which of the following fraud symptoms is often the easiest to detect?

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Which of the following usually motivates embezzlers to indulge in a fraudulent activity?

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______ fraud symptoms are procedures or relationships that are unusual or that do not make sense.

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Which of the following is NOT an analytical fraud symptom?

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Which of the following is a highly suspicious financial statement relationship?

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Which of the following is an example of accounting anomaly fraud symptom?

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Increased scrap,excessive purchases,physical abnormalities,etc.are all examples of:

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An auditor noticed that company B had an exorbitant increase in sales and drastic decreases in its inventory and accounts receivables.The above statement symbolizes which fraud symptom?

Correct AnswerverifiedShow Answer

What does the following journal entry indicate? Legal Expense..................2,900 Cash...............................2,900 ​

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Recording an expense to conceal fraud involves making a fictitious journal entry.A faulty journal entry is an example of which fraud symptom?

Correct AnswerverifiedShow Answer

An employee decides to steal cash from his/her employer.What would be the best way to conceal such a fraud?

Correct AnswerverifiedShow Answer

How does a smart embezzler manipulate accounting records to conceal fraud?

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​Which of the following is a true statement?

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Lifestyle changes of fraud perpetrators are related to which of the following fraud elements?

Correct AnswerverifiedShow Answer

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Which of the following possible actions may discourage an employee to report suspected fraudulent activities?

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Which of the following acts by management could discourage someone from reporting an observed act of fraud?

Correct Answer
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What does the following journal entry indicate? Legal Expense..................2,900 Cash...............................2,900

Correct Answer
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Which of the following is a true statement?

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Correct Answer
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