Fraud Examination Actual Test Questions And Solutions Comprehensive Review Package

FRAUD EXAMINATION ACTUAL TEST
QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE

●● Perpetrators use trickery, confidence, and deception to commit fraud.
Answer: True


●● One of the most common responses to fraud is disbelief by those
around the fraud.
Answer: True


●● Manufacturing companies with a profit margin of 10 percent must
usually generate about 10 times as much revenue as the dollar amount of
the fraud in order to restore net income to its pre-fraud level.
Answer: True


●● Fraud involves using physical force to take something from someone
Answer: False


●● Identity theft is an example of employee embezzlement.
Answer: False

,●● When perpetrators are criminally convicted of fraud, they often serve
jail sentences and/or pay fines.
Answer: True


●● Management fraud is deception perpetrated by an organization's top
management.
Answer: True


●● A Ponzi scheme is considered to be a type of investment scam.
Answer: True


●● Most people agree that fraud-related careers will be in demand in the
future.
Answer: True


●● In civil cases, fraud experts are rarely used as expert witnesses.
Answer: False


●● Many companies try to hide their losses from fraud rather than make
them public.
Answer: True

,●● The only group/business that must report employee embezzlement is
the federal government
Answer: False


●● Advances in technology have had no effect either on the size or
frequency of fraud or on the detection or investigation of fraud.
Answer: False


●● Fraud losses generally reduce a firm's income on a dollar-for-dollar
basis.
Answer: True


●● The single most critical element for a fraud to be successful is
opportunity.
Answer: False


●● Fraud perpetrators are often those who are least suspected and most
trusted
Answer: True


●● Unintentional errors in financial statements are a form of fraud.
Answer: False

, ●● Occupational fraud is fraud committed on behalf of an organization.
Answer: False


●● Companies that commit financial statement fraud are often
experiencing net losses or have profits that are significantly lower than
expectations.
Answer: True


●● Indirect fraud occurs when a company's assets go directly into the
perpetrator's pockets without the involvement of third parties
Answer: False


●● In vendor fraud, customers don't pay for goods purchased.
Answer: False


●● A negative outcome in a civil lawsuit usually results in jail time for
the perpetrator.
Answer: False


●● When fraud is committed, criminal prosecution usually proceeds
before civil litigation.
Answer: True