WGU D551 C254 FRAUD AND FORENSIC
ACCOUNTING EXAM PREPARATION TEST
BANK WITH CORRECT ANSWERS
●● Fraud is also called
Answer: "theft by deception"
●● Elements of fraud
Answer: 1) material false statement
2) knowledge that the statement was false when it was spoken
3) reliance on the false statement by the victim
4) damages resulting from the victim's reliance on the false statement
●● material
Answer: big enough to matter
●● false statement
Answer: lie
●● What are the major categories of fraud?
Answer: 1) Asset misappropriation
,2) Corruption and Abuse (misuse of influence in a business transaction)
3) Financial statement fraud (misrepresenting financial information)
4) Other fraudulent schemes
●● asset misappropriation
Answer: involves the theft or misuse of assets
●● Common examples of asset misappropriation
Answer: - skimming cash and checks
- stealing inventory
- payroll fraud
●● Corruption
Answer: the unlawful or wrongful misuse of influence in a business
transaction to procure personal benefit
●● Examples of corruption
Answer: - kickbacks
- bribery
- conflicts of interest
●● Legal term for stealing
,Answer: larceny
●● conversion
Answer: a tort that means taking possession of property that doesn't
belong to you and thereby depriving the true owner of the property for
any length of time
●● larceny
Answer: 1. there was taking or carrying away
2. of the money or property of another
3. without the consent of the owner and
4. with the intent to deprive the owner of its use of possession
●● The act of stealing or larceny makes an employee an
Answer: embezzler
●● embezzlement
Answer: unlawful taking of property by someone to whom it was
entrusted
●● fiduciary duty
, Answer: That duty owed by an agent to act in the highest good faith
toward the principal and not to obtain any advantage over the latter by
the slightest misrepresentation, concealment, duress or pressure.
●● forensic accounting
Answer: application of financial principles and theories to facts or
hypotheses at issue in a legal dispute.
- intersection of accounting and the law
●● 2 primary functions of forensic accounting
Answer: 1) litigation advisory services (expert witness or consultant)
2) investigating services (uses accountant's skills but may not result in
testimony)
●● Examples of nonfraud cases that a forensic accountant might help
with:
Answer: - damage claims
- workplace issues (lost wages, disability, etc)
- assets and business valuations
- costs and lost profits
- insurance claims
- divorce and matrimonial issues
- intellectual property infringement
ACCOUNTING EXAM PREPARATION TEST
BANK WITH CORRECT ANSWERS
●● Fraud is also called
Answer: "theft by deception"
●● Elements of fraud
Answer: 1) material false statement
2) knowledge that the statement was false when it was spoken
3) reliance on the false statement by the victim
4) damages resulting from the victim's reliance on the false statement
●● material
Answer: big enough to matter
●● false statement
Answer: lie
●● What are the major categories of fraud?
Answer: 1) Asset misappropriation
,2) Corruption and Abuse (misuse of influence in a business transaction)
3) Financial statement fraud (misrepresenting financial information)
4) Other fraudulent schemes
●● asset misappropriation
Answer: involves the theft or misuse of assets
●● Common examples of asset misappropriation
Answer: - skimming cash and checks
- stealing inventory
- payroll fraud
●● Corruption
Answer: the unlawful or wrongful misuse of influence in a business
transaction to procure personal benefit
●● Examples of corruption
Answer: - kickbacks
- bribery
- conflicts of interest
●● Legal term for stealing
,Answer: larceny
●● conversion
Answer: a tort that means taking possession of property that doesn't
belong to you and thereby depriving the true owner of the property for
any length of time
●● larceny
Answer: 1. there was taking or carrying away
2. of the money or property of another
3. without the consent of the owner and
4. with the intent to deprive the owner of its use of possession
●● The act of stealing or larceny makes an employee an
Answer: embezzler
●● embezzlement
Answer: unlawful taking of property by someone to whom it was
entrusted
●● fiduciary duty
, Answer: That duty owed by an agent to act in the highest good faith
toward the principal and not to obtain any advantage over the latter by
the slightest misrepresentation, concealment, duress or pressure.
●● forensic accounting
Answer: application of financial principles and theories to facts or
hypotheses at issue in a legal dispute.
- intersection of accounting and the law
●● 2 primary functions of forensic accounting
Answer: 1) litigation advisory services (expert witness or consultant)
2) investigating services (uses accountant's skills but may not result in
testimony)
●● Examples of nonfraud cases that a forensic accountant might help
with:
Answer: - damage claims
- workplace issues (lost wages, disability, etc)
- assets and business valuations
- costs and lost profits
- insurance claims
- divorce and matrimonial issues
- intellectual property infringement
