WGU D551 - FRAUD & FORENSIC
ACCOUNTING CERTIFICATION SCRIPT
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ The Fourteenth Amendment.
Answer: entitles a person to due process of law and equal protections under
the law
◍ SAS No. 99, AU316.
Answer: offers a variety of non-monetary motivations for financial reporting
fraud, such as meeting analysts' earnings estimates for public companies
◍ Remediation.
Answer: 1. Recovery of losses through insurance or the legal process2.
Support for the legal process as it tries to resolve the matter3. Modification
of operational processes and internal controls.
◍ Independent Businessmen.
Answer: persons who were in business for themselves and who converted
deposits that had been entrusted to them.
◍ The Chief Executive Officer (CEO) and/or Chief Financial Officer (CFO)
was named in the AAER for some level of involvement in ______ of the
cases in the COSO study..
Answer: 89%
◍ Mail & Wire Fraud.
Answer: schemes that use the postal service or interstate wires, such as
telephone calls, email, or other electronic communications, to execute the
fraud.
,◍ Statement on Auditing Standards (SAS) No. 69.
Answer: indicates the primary sources of generally accepted accounting
principles—FASB Standards and Interpretations, APB Opinions, and
American Institute of Certified Public Accountants (AICPA) Accounting
Research Bulletins.
◍ Horizontal analysis.
Answer: a technique for analyzing the percentage change in individual
financial statement items from one year to the next.
◍ Theft in the Mailroom—Incoming Checks.
Answer: where employees charged with opening the daily mail simply take
incoming checks instead of processing them.
◍ SAS No. 16 was the first official statement changing auditors'
responsibilities so that they have some obligation to actually look for
irregularities. What did it NOT require auditors to do?.
Answer: Detect fraud
◍ Fraudulent Write-Offs or Discounts.
Answer: Where a customer's account is fraudulently written off or entries
are posted to discounts and allowances accounnts wrongly.
◍ Daubert Standard.
Answer: The test currently used in courts related to the admissability of
expert testimony.
◍ Concealment.
Answer: disguising or hiding the fraud.
◍ Foreign Corrupt Practices Act.
Answer: enacted for the purpose of making it unlawful for certain classes of
persons and entities to make payments to foreign government officials to
assist in obtaining or retaining business.
◍ Current Ratio.
Answer: Current assets/current liabilities
,◍ The COSO did a study identifying and classifying different types of
financial statement fraud and specific schemes. Which type of fraud was
found most often?.
Answer: Improper revenue recognition
◍ Periodicity.
Answer: uses the principle of dividing economic activity into specific time
intervals, such as monthly, quarterly, and annually.
◍ PCAOB AS 2401.13.
Answer: Due professional care requires the auditor to exercise professional
skepticism.
◍ Channel Stuffing.
Answer: This refers to the sale of an unusually large (and unnecessary)
quantity of a product to distributors/retailers, who are encouraged to
overbuy through the use of deep discounts and/or extended payment terms.
◍ Timing Differences.
Answer: the recording of revenue and/or expenses in improper periods.
◍ Affirmative Acts.
Answer: are compelling and are actions that establish intent (deliberate
action), often focusing on concealment.
◍ Search Warrant.
Answer: Search warrants are issued by a judge based on probable cause and
put the investigator in charge of the evidentiary search.
◍ Three Elements of Fraud.
Answer: 1. The scheme or fraud act.2. The concealment activity.3. The
conversion or benefit.
◍ Beating the accounting system.
Answer: In this approach, the fraudster feeds false and fictitious information
into the accounting system to manipulate reported results by an amount
greater than can be achieved by simply "playing the accounting system."
, ◍ Presolicitation phase.
Answer: before bids are officially sought for a project
◍ Racketeering.
Answer: the act of engaging in criminal activity as a structured group,
◍ Chapter 7 Bankruptcy.
Answer: deals with the liquidation of the debtor's assets, including
individuals and businesses
◍ Altering Cash Counts or Cash Register Tapes.
Answer: alter the cash counts from their registers to match the total receipts
reflected on their register tape.
◍ Which of the following two emotions are often associated with (and/or
motivate) fraud?.
Answer: Greed and fear
◍ net realizable value (NRV).
Answer: the amount of money that would be realized upon the sale of the
asset, less the costs to sell it (i.e., the cash equivalent)
◍ True or False - Middle management never has an opportunity of incentive to
overstate earnings; only the top-level management really benefits from
having a falsely inflated stock price..
Answer: FalseDivision managers could inflate the earnings from their sphere
of influence to meet some internal benchmark or other incentive.
◍ Probable Cause.
Answer: the standard by which law enforcement may make an arrest,
conduct a personal or property search, or obtain a warrant.
◍ True or False - Fraud is a visible, obvious crime.
Answer: False
◍ Terry Stop.
Answer: if a police officer has reasonable suspicion (not probable cause)
that a crime has been committed or will soon be committed, that officer may
ACCOUNTING CERTIFICATION SCRIPT
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ The Fourteenth Amendment.
Answer: entitles a person to due process of law and equal protections under
the law
◍ SAS No. 99, AU316.
Answer: offers a variety of non-monetary motivations for financial reporting
fraud, such as meeting analysts' earnings estimates for public companies
◍ Remediation.
Answer: 1. Recovery of losses through insurance or the legal process2.
Support for the legal process as it tries to resolve the matter3. Modification
of operational processes and internal controls.
◍ Independent Businessmen.
Answer: persons who were in business for themselves and who converted
deposits that had been entrusted to them.
◍ The Chief Executive Officer (CEO) and/or Chief Financial Officer (CFO)
was named in the AAER for some level of involvement in ______ of the
cases in the COSO study..
Answer: 89%
◍ Mail & Wire Fraud.
Answer: schemes that use the postal service or interstate wires, such as
telephone calls, email, or other electronic communications, to execute the
fraud.
,◍ Statement on Auditing Standards (SAS) No. 69.
Answer: indicates the primary sources of generally accepted accounting
principles—FASB Standards and Interpretations, APB Opinions, and
American Institute of Certified Public Accountants (AICPA) Accounting
Research Bulletins.
◍ Horizontal analysis.
Answer: a technique for analyzing the percentage change in individual
financial statement items from one year to the next.
◍ Theft in the Mailroom—Incoming Checks.
Answer: where employees charged with opening the daily mail simply take
incoming checks instead of processing them.
◍ SAS No. 16 was the first official statement changing auditors'
responsibilities so that they have some obligation to actually look for
irregularities. What did it NOT require auditors to do?.
Answer: Detect fraud
◍ Fraudulent Write-Offs or Discounts.
Answer: Where a customer's account is fraudulently written off or entries
are posted to discounts and allowances accounnts wrongly.
◍ Daubert Standard.
Answer: The test currently used in courts related to the admissability of
expert testimony.
◍ Concealment.
Answer: disguising or hiding the fraud.
◍ Foreign Corrupt Practices Act.
Answer: enacted for the purpose of making it unlawful for certain classes of
persons and entities to make payments to foreign government officials to
assist in obtaining or retaining business.
◍ Current Ratio.
Answer: Current assets/current liabilities
,◍ The COSO did a study identifying and classifying different types of
financial statement fraud and specific schemes. Which type of fraud was
found most often?.
Answer: Improper revenue recognition
◍ Periodicity.
Answer: uses the principle of dividing economic activity into specific time
intervals, such as monthly, quarterly, and annually.
◍ PCAOB AS 2401.13.
Answer: Due professional care requires the auditor to exercise professional
skepticism.
◍ Channel Stuffing.
Answer: This refers to the sale of an unusually large (and unnecessary)
quantity of a product to distributors/retailers, who are encouraged to
overbuy through the use of deep discounts and/or extended payment terms.
◍ Timing Differences.
Answer: the recording of revenue and/or expenses in improper periods.
◍ Affirmative Acts.
Answer: are compelling and are actions that establish intent (deliberate
action), often focusing on concealment.
◍ Search Warrant.
Answer: Search warrants are issued by a judge based on probable cause and
put the investigator in charge of the evidentiary search.
◍ Three Elements of Fraud.
Answer: 1. The scheme or fraud act.2. The concealment activity.3. The
conversion or benefit.
◍ Beating the accounting system.
Answer: In this approach, the fraudster feeds false and fictitious information
into the accounting system to manipulate reported results by an amount
greater than can be achieved by simply "playing the accounting system."
, ◍ Presolicitation phase.
Answer: before bids are officially sought for a project
◍ Racketeering.
Answer: the act of engaging in criminal activity as a structured group,
◍ Chapter 7 Bankruptcy.
Answer: deals with the liquidation of the debtor's assets, including
individuals and businesses
◍ Altering Cash Counts or Cash Register Tapes.
Answer: alter the cash counts from their registers to match the total receipts
reflected on their register tape.
◍ Which of the following two emotions are often associated with (and/or
motivate) fraud?.
Answer: Greed and fear
◍ net realizable value (NRV).
Answer: the amount of money that would be realized upon the sale of the
asset, less the costs to sell it (i.e., the cash equivalent)
◍ True or False - Middle management never has an opportunity of incentive to
overstate earnings; only the top-level management really benefits from
having a falsely inflated stock price..
Answer: FalseDivision managers could inflate the earnings from their sphere
of influence to meet some internal benchmark or other incentive.
◍ Probable Cause.
Answer: the standard by which law enforcement may make an arrest,
conduct a personal or property search, or obtain a warrant.
◍ True or False - Fraud is a visible, obvious crime.
Answer: False
◍ Terry Stop.
Answer: if a police officer has reasonable suspicion (not probable cause)
that a crime has been committed or will soon be committed, that officer may
