WGU D550 ETHICS FOR ACCOUNTANTS
OBJECTIVE ASSESSMENT ACTUAL
QUESTIONS AND CORRECT ANSWERS
◉ Fraud in the FS, the misappropriation of assets (theft) and
subsequent cover up, and disclosure fraud
Answer: What are the different forms of fraud?
◉ Asset Misappropriatiion Schemes
Answer: when an employee steals or misuses resources, such as
charging personal expenses to the company card while traveling
on business trips
◉ Corruption Schemes
Answer: include misusing one's position or influence in an
organization for personal gain
◉ a tip (43% reported)
Answer: What was the most common detection method reported
in 2016 ACFE survey?
◉ termination (66%)
,Answer: What was the most common disciplinary method taken
in occupational fraud cases was?
◉ - living beyond means (42%)
- financial difficulties (26%)
- unusually close association with vendor/customer
- control issues, unwillingness to share duties
- no behavioral red flags
- "wheeler-dealer" attitude
- irritability, suspiciousness, or defensiveness
- divorce/family problems
- addiction problems
- complained about inadequate pay
- excessve pressure from within the org
- refusal to take vacations
- past employment-related problems
- social isolation
- past legal problems
- complained about lack of authority
- excessive family/peer pressure for success
- other
- instability in life circumstances
Answer: Fraud red flags include:
,◉ ACFE Study
Answer: found that payroll schemes accounted for 9% of the asset
misappropriations, had a median cost of $62,000, and lasted a
median of 2 years before being detected
◉ - poor tone at the top
- dominating and intimidating personalities
- mistrust
- excessive team loyalty
- management doesnt want to hear about problems
- a lack of sound policies and procedures
- the perception that wrongdoing will not be addressed if
misconduct is reported
Answer: Factors that discourage the reporting of fraud according
to report from anit-fraud collaboration include:
◉ - fear of the unknown
- fear that the report will not be handled anonymously or
confidentially
- fear that the reporters identity will be revealed to other in the
organization
- concern that the person perpetrating the misconduct will not be
held responsible
Answer: Factors that discourage employees from coming forward
include:
, ◉ - retaliation by coworkers
- termination
- future reputation
- impact on others
- results of investigation determine that the misconduct
unsustainable
- emotional cost
Answer: What are the potential consequences for reporting
suspected fraud?
◉ FS Fraud
Answer: occurs when an employee, typically a member of top
management, causes a misstatement or omission of material in
the organization's financial reports
◉ recording ficticious revenues, understating reported expenses,
artificially inflating reported assets, failing to accrue expenses at
the end of the year, and accelerating the recording of revenue into
an earlier period (timing differences)
Answer: What are some examples of FS fraud?
◉ situational pressure, perceived opportunity, and rationalization
Answer: What are the elements of the fraud triangle that explain
why FS fraud occurs?
OBJECTIVE ASSESSMENT ACTUAL
QUESTIONS AND CORRECT ANSWERS
◉ Fraud in the FS, the misappropriation of assets (theft) and
subsequent cover up, and disclosure fraud
Answer: What are the different forms of fraud?
◉ Asset Misappropriatiion Schemes
Answer: when an employee steals or misuses resources, such as
charging personal expenses to the company card while traveling
on business trips
◉ Corruption Schemes
Answer: include misusing one's position or influence in an
organization for personal gain
◉ a tip (43% reported)
Answer: What was the most common detection method reported
in 2016 ACFE survey?
◉ termination (66%)
,Answer: What was the most common disciplinary method taken
in occupational fraud cases was?
◉ - living beyond means (42%)
- financial difficulties (26%)
- unusually close association with vendor/customer
- control issues, unwillingness to share duties
- no behavioral red flags
- "wheeler-dealer" attitude
- irritability, suspiciousness, or defensiveness
- divorce/family problems
- addiction problems
- complained about inadequate pay
- excessve pressure from within the org
- refusal to take vacations
- past employment-related problems
- social isolation
- past legal problems
- complained about lack of authority
- excessive family/peer pressure for success
- other
- instability in life circumstances
Answer: Fraud red flags include:
,◉ ACFE Study
Answer: found that payroll schemes accounted for 9% of the asset
misappropriations, had a median cost of $62,000, and lasted a
median of 2 years before being detected
◉ - poor tone at the top
- dominating and intimidating personalities
- mistrust
- excessive team loyalty
- management doesnt want to hear about problems
- a lack of sound policies and procedures
- the perception that wrongdoing will not be addressed if
misconduct is reported
Answer: Factors that discourage the reporting of fraud according
to report from anit-fraud collaboration include:
◉ - fear of the unknown
- fear that the report will not be handled anonymously or
confidentially
- fear that the reporters identity will be revealed to other in the
organization
- concern that the person perpetrating the misconduct will not be
held responsible
Answer: Factors that discourage employees from coming forward
include:
, ◉ - retaliation by coworkers
- termination
- future reputation
- impact on others
- results of investigation determine that the misconduct
unsustainable
- emotional cost
Answer: What are the potential consequences for reporting
suspected fraud?
◉ FS Fraud
Answer: occurs when an employee, typically a member of top
management, causes a misstatement or omission of material in
the organization's financial reports
◉ recording ficticious revenues, understating reported expenses,
artificially inflating reported assets, failing to accrue expenses at
the end of the year, and accelerating the recording of revenue into
an earlier period (timing differences)
Answer: What are some examples of FS fraud?
◉ situational pressure, perceived opportunity, and rationalization
Answer: What are the elements of the fraud triangle that explain
why FS fraud occurs?
