Midterm Study Guide FRAUD AN FOTRENSIC

Which of the following best describes the objective of a fraud examination? - answer-To determine whether a crime has been committed, and if so, who is responsible Once sufficient predication has been established, what is the first step a fraud examiner following the fraud theory approach should take? - answer-Analyze data In a fraud examination, evidence is usually gathered in a manner that moves from general to specific - answer-True Which of the following is the correct order for a fraud examiner to interview witnesses? - answer-Neutral third-parties, corroborative witnesses, co-conspirators, suspect Who developed the Fraud Scale? - answer-W. Steve Albrecht Which of the following is not one of the legs of the Fraud Triangle? - answer-Situational environment In a study by Steve Albrecht, Marshall Romney, and Keith Howe, participants were asked to rank personal characteristics as motivating factors that contributed to fraud. The highest ranked factor was: - answer-Living beyond one's means In a study by Steve Albrecht, Marshall Romney, and Keith Howe, participants were asked to rank characteristics of the organizational environment that contributed to fraud. The highest ranked factor was: - answer-Placing too much trust in key employees In the 2010 Report to the Nations on Occupational Fraud and Abuse, the category that committed the smallest percentage of occupational fraud was: - answer-External parties In the 2010 Report to the Nations on Occupational Fraud and Abuse, the median loss in schemes committed by males was higher than the median loss in schemes committed by females - answer-True In the 2010 Report to the Nations on Occupational Fraud and Abuse, most perpetrators of fraud had been previously charged with or convicted of a fraud-related offense. - answer-False Eddie Dolan is the manager of shipping and receiving and has been working at the UFA Company for twenty years. He rarely calls in sick and gets good performance reviews every year. For the past year, his wife's company, ABC Co., has been in serious financial trouble. ABC Co. likely will not be able to make the payroll for next month and may have to close down. Which leg of the Fraud Triangle best applies to Dolan's situation? - answer-Non-sharable financial need Alice Durant works in the accounts payable department for the BC Group. She recently found out that Della Granger, another A/P clerk, received a bigger raise than she did, even though Durant has been with the company longer and frequently has to correct Granger's errors. Which leg of the Fraud Triangle best applies to Durant's situation? - answer-Rationalization What is fraud examination? - answer-Fraud examination is a process for resolving allegations of fraud from inception to disposition. Fraud examinations involve not only financial analysis, but also interviewing witnesses, taking statements, writing reports, testifying to findings, and assisting in the prevention and detection of fraud. Occupational fraud and abuse includes any personal enrichment that results from misuse or misapplication of the employing organization's resources or assets. There are four key elements to this activity. What are they? - answer-The four key elements to occupational fraud abuse are that it (1) is clandestine, (2) violates the employee's fiduciary duties to the organization, (3) is committed for the purpose of direct or ¬indirect financial benefit to the employee, and (4) costs the employing organization assets, revenues, or reserves. Cressey