WGU D551 PRE-ASSESSMENT: FRAUD AND
FORENSIC ACCOUNTING CERTIFICATION
SCRIPT 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ What makes financial fraud easier?.
Answer: the nature/way books are kept
◍ Concealed liabilities and expenses.
Answer: -Significant impact on reported earnings to make a company appear
more profitable-Easier to commit than falsifying sales transactions because a
lack of an audit trail
◍ A 3rd party sues an accounting firm for false representation. Before the trial
begins, the 2 parties agree to argue their case in front of a neutral 3rd party
& to accept the decision made by that party as the final decision. Which type
of negotiated remedy have the parties agreed upon?1-Pretrial
conference2-Binding arbitration3-Binding mediation4-Summary judgement.
Answer: 2-Binding arbitration
◍ A company reviews employee personal expenses incurred during
nonworking hours & compares them to work hours. Which fraud scheme is
management attempting to detect?1-Mischaracterized expense
reimbursements2-Register disbursement schemes3-Commission
schemes4-Payroll fraud.
Answer: 1-Mischaracterized expense reimbursements
◍ perception of detetion.
Answer: the stronger the perception that theft would be detected, the less
likely someone will commit fraud
,◍ While auditing a tech company's financial records, Nora spots some entries
made by the CF
O. In almost all such cases, the entries are recorded at odd hours. These
entries are unusual because such entries are generally made by a clerical
employee during regular business hours. Which type of early sign of fraud
or red flag is this?1-Lifestyle symptom2-Analytical anomaly3-Behavioral
symptom4-Accounting anomaly.
Answer: 4-Accounting anomaly
◍ Cressey's Hypothesis.
Answer: Also known as the Fraud Triangle1-Motivation (Pressure)
Violation of ascribed obligation (can't share their financial problems with
others)2- Opportunity3-Rationalization
◍ What is playing the accounting system?.
Answer: The fraudster uses the accounting system as a tool to generate the
results he wants.
◍ Dr. Steve Albrecht.
Answer: - assembled a complete list of pressure, opportunity, and integrity
variables- created a list of 50 possible indicators of occupational fraud and
abuse- variables fell into 2 principle categories- perpetrator characteristics-
organizational environment- developed the "Fraud Scale"
◍ What is the best deterrent for fraud?.
Answer: fear of getting caught
◍ Cash flows should be.
Answer: examined in relation to a company's reported income over time and
in comparison to competitors in the industry and industry averages.
◍ ghost employees are often.
Answer: an accomplice of the fraudster
◍ Preventing and detecting conflict of interest schemes.
Answer: -Specifically address conflict of interest illegalities in company
, ethics policy-Annual financial disclosure statement-Communication with
employees regarding their other business interests-Establish anonymous
reporting mechanism to receive tips and complaints-Periodically run
comparisons between vendor and employee addresses and phone numbers
◍ fraudster may also.
Answer: create a false sale so it appears that the missing inventory was
shipped to a customer
◍ The act of stealing or larceny makes an employee an.
Answer: embezzler
◍ A company requires incoming revenues to be itemized on a deposit slip to
trace deposits to specific payments. Which fraud scheme is the company
attempting to prevent?1-Billing2-Lapping3-Skimming4-Collusion.
Answer: 2-Lapping
◍ A company requires employees to complete an annual financial disclosure
statement. Which fraud scheme is the company attempting to
prevent?1-Conflicts of Interest2-Economic Extortion3-Illegal
Gratuities4-Bribery.
Answer: 1-Conflicts of Interest
◍ A company purchased new machinery for $450,000. By the end of the fiscal
year, the net realizable value (NRV) was $380,000. Company reported it at
NRV instead of cost so that return on asset is as per the industry average.
Which accounting principle did the company violate to commit this
fraud?1-Going Concern2-Matching3-Historical Cost4-Accrual.
Answer: 3-Historical Cost
◍ Preventing bid-rigging schemes.
Answer: -Monitor price trends-Change orders or amendments-Very large,
unexplained price differences among bidders-Patterns within bidding
process •Last bidder always wins •Repeatedly winning by narrow margin
•Predictable rotation of bid winners-Losing bidders appear as
subcontractors-Bids from fictitious suppliers-Qualified bidders fail to submit
, contract proposals-Split large projects into several smaller jobs
◍ What are the 6 essential elements of fraud?.
Answer: Realization of gain by the perpetratorFalse representation of
material factknowledge of the falsityintent to deceivereliance by the
victimresulting damages
◍ A law enforcement officer arrests a bank employee suspected of
embezzlement. What must the officer do at the time of the arrest?1-Remind
the suspect that if they waive the right to be silent, it cannot be
revoked.2-Remind the suspect that they are allowed an attorney if they agree
to cooperate.3-Read the 6th Amendment provision to the suspect.4-Read the
Miranda warning to the suspect..
Answer: 4-Read the Miranda warning to the suspect.
◍ bribery.
Answer: someone of value offered to influence business decision or official
act- a person "buys" something of value with the bribes - buys influence
over the recipient"I'm going give you money/something of value so I can do
this thing."
◍ Concealed expenses.
Answer: Concealed expenses can take several forms: misrepresenting
legitimate business expenses as personal, or fabricating expenses altogether
to inflate profits or assets,failing to record liabilities or understating them,
◍ Preventing and detecting noncash thefts that are concealed by fraudulent
support.
Answer: - separate duties of ordering goods, receiving goods, and
maintaining perpetual inventory records, and issuing payments- match
invoices to receiving reports before payments are issued (buying)- match
packing slip to PO to prevent selling - monitor increases in bad debt expense
(writing off inventory/receivables)
◍ Fraud may be prosecuted.
Answer: criminally OR civilly
FORENSIC ACCOUNTING CERTIFICATION
SCRIPT 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ What makes financial fraud easier?.
Answer: the nature/way books are kept
◍ Concealed liabilities and expenses.
Answer: -Significant impact on reported earnings to make a company appear
more profitable-Easier to commit than falsifying sales transactions because a
lack of an audit trail
◍ A 3rd party sues an accounting firm for false representation. Before the trial
begins, the 2 parties agree to argue their case in front of a neutral 3rd party
& to accept the decision made by that party as the final decision. Which type
of negotiated remedy have the parties agreed upon?1-Pretrial
conference2-Binding arbitration3-Binding mediation4-Summary judgement.
Answer: 2-Binding arbitration
◍ A company reviews employee personal expenses incurred during
nonworking hours & compares them to work hours. Which fraud scheme is
management attempting to detect?1-Mischaracterized expense
reimbursements2-Register disbursement schemes3-Commission
schemes4-Payroll fraud.
Answer: 1-Mischaracterized expense reimbursements
◍ perception of detetion.
Answer: the stronger the perception that theft would be detected, the less
likely someone will commit fraud
,◍ While auditing a tech company's financial records, Nora spots some entries
made by the CF
O. In almost all such cases, the entries are recorded at odd hours. These
entries are unusual because such entries are generally made by a clerical
employee during regular business hours. Which type of early sign of fraud
or red flag is this?1-Lifestyle symptom2-Analytical anomaly3-Behavioral
symptom4-Accounting anomaly.
Answer: 4-Accounting anomaly
◍ Cressey's Hypothesis.
Answer: Also known as the Fraud Triangle1-Motivation (Pressure)
Violation of ascribed obligation (can't share their financial problems with
others)2- Opportunity3-Rationalization
◍ What is playing the accounting system?.
Answer: The fraudster uses the accounting system as a tool to generate the
results he wants.
◍ Dr. Steve Albrecht.
Answer: - assembled a complete list of pressure, opportunity, and integrity
variables- created a list of 50 possible indicators of occupational fraud and
abuse- variables fell into 2 principle categories- perpetrator characteristics-
organizational environment- developed the "Fraud Scale"
◍ What is the best deterrent for fraud?.
Answer: fear of getting caught
◍ Cash flows should be.
Answer: examined in relation to a company's reported income over time and
in comparison to competitors in the industry and industry averages.
◍ ghost employees are often.
Answer: an accomplice of the fraudster
◍ Preventing and detecting conflict of interest schemes.
Answer: -Specifically address conflict of interest illegalities in company
, ethics policy-Annual financial disclosure statement-Communication with
employees regarding their other business interests-Establish anonymous
reporting mechanism to receive tips and complaints-Periodically run
comparisons between vendor and employee addresses and phone numbers
◍ fraudster may also.
Answer: create a false sale so it appears that the missing inventory was
shipped to a customer
◍ The act of stealing or larceny makes an employee an.
Answer: embezzler
◍ A company requires incoming revenues to be itemized on a deposit slip to
trace deposits to specific payments. Which fraud scheme is the company
attempting to prevent?1-Billing2-Lapping3-Skimming4-Collusion.
Answer: 2-Lapping
◍ A company requires employees to complete an annual financial disclosure
statement. Which fraud scheme is the company attempting to
prevent?1-Conflicts of Interest2-Economic Extortion3-Illegal
Gratuities4-Bribery.
Answer: 1-Conflicts of Interest
◍ A company purchased new machinery for $450,000. By the end of the fiscal
year, the net realizable value (NRV) was $380,000. Company reported it at
NRV instead of cost so that return on asset is as per the industry average.
Which accounting principle did the company violate to commit this
fraud?1-Going Concern2-Matching3-Historical Cost4-Accrual.
Answer: 3-Historical Cost
◍ Preventing bid-rigging schemes.
Answer: -Monitor price trends-Change orders or amendments-Very large,
unexplained price differences among bidders-Patterns within bidding
process •Last bidder always wins •Repeatedly winning by narrow margin
•Predictable rotation of bid winners-Losing bidders appear as
subcontractors-Bids from fictitious suppliers-Qualified bidders fail to submit
, contract proposals-Split large projects into several smaller jobs
◍ What are the 6 essential elements of fraud?.
Answer: Realization of gain by the perpetratorFalse representation of
material factknowledge of the falsityintent to deceivereliance by the
victimresulting damages
◍ A law enforcement officer arrests a bank employee suspected of
embezzlement. What must the officer do at the time of the arrest?1-Remind
the suspect that if they waive the right to be silent, it cannot be
revoked.2-Remind the suspect that they are allowed an attorney if they agree
to cooperate.3-Read the 6th Amendment provision to the suspect.4-Read the
Miranda warning to the suspect..
Answer: 4-Read the Miranda warning to the suspect.
◍ bribery.
Answer: someone of value offered to influence business decision or official
act- a person "buys" something of value with the bribes - buys influence
over the recipient"I'm going give you money/something of value so I can do
this thing."
◍ Concealed expenses.
Answer: Concealed expenses can take several forms: misrepresenting
legitimate business expenses as personal, or fabricating expenses altogether
to inflate profits or assets,failing to record liabilities or understating them,
◍ Preventing and detecting noncash thefts that are concealed by fraudulent
support.
Answer: - separate duties of ordering goods, receiving goods, and
maintaining perpetual inventory records, and issuing payments- match
invoices to receiving reports before payments are issued (buying)- match
packing slip to PO to prevent selling - monitor increases in bad debt expense
(writing off inventory/receivables)
◍ Fraud may be prosecuted.
Answer: criminally OR civilly
