Test Bank for Fraud Examination, 7th Edition by W. Steve Albrecht | All Chapters Included.

Test Bank for Fraud Examination, 7th Edition by W. Steve Albrecht | All Chapters Included. Chapter 01 - The Nature of Fraud Page 1 1. One way that criminal law differs from civil law is that it: a. provides remedies for violations of private rights. b. must yield a unanimous verdict. c. can have a jury of fewer than 12 persons. d. allows for various claims in one action. ANSWER: b FEEDBACK: a. Incorrect. The requirement to provide remedies for violations of private rights is a characteristic of civil law; criminal law deals with crimes against society as a whole. b. Correct. Criminal trials must result in a unanimous verdict. c. Incorrect. The requirement for a unanimous vote characteristic of civil law; criminal trial juries must have 12 persons. d. Incorrect. In inclusion of various claims in one action is a characteristic of civil law; criminal law permits only one claim at a time. POINTS: 1 DIFFICULTY: easy REFERENCES: Criminal and Civil Prosecution of Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil fraud laws. OTHER: Source: 6e revised DATE CREATED: 2/8/2024 7:10 AM DATE MODIFIED: 2/8/2024 7:14 AM 2. Which of the following is NOT an common element of a Ponzi scheme? a. Gaining other's confidence b. Promising abnormally high returns c. Investing collected money d. Using part of the investment principle to pay previous investors ANSWER: c FEEDBACK: a. Incorrect. Gaining other’s confidence is one of the most important elements of the “con.” b. Incorrect. Promising abnormally high returns is how fraudsters lure in investors. c. Correct. Investing collected money is very unlikely. d. Incorrect. In Ponzi schemes, the original principle is often used to make interest payments. POINTS: 1 DIFFICULTY: moderate REFERENCES: Types of Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. OTHER: Source: 6e , revised DATE CREATED: 2/9/2024 5:11 AM DATE MODIFIED: 2/9/2024 5:32 AM All Chapters Answers Included Chapter 01 - The Nature of Fraud Page 2 3. The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT: a. not reporting bribe income may be grounds for being charged with tax evasion. b. a tax filing that excludes income from fraud may be considered a false return. c. bribes may be lawfully deducted as business expenses. d. failure to report income from fraud may be grounds for being charged with tax evasion. ANSWER: c FEEDBACK: a. Incorrect. Not reporting bribe income may be grounds for being charged with tax evasion. b. Incorrect. Filing income tax that excludes income from fraud may be considered an improper tax filing. c. Correct. Bribes cannot be deducted as legitimate business expenses. d. Incorrect. Failure to report income from fraud or bribes may be prosecuted as tax evasion. POINTS: 1 DIFFICULTY: easy REFERENCES: Criminal Law QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil fraud laws. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 5:38 AM DATE MODIFIED: 2/9/2024 5:40 AM 4. Which one of the following is NOT a characteristic of a criminal proceeding? a. Criminal proceedings deal with offenses against society. b. Consequences of criminal proceedings include restitution and damage payments. c. Criminal proceedings involve a jury of 12 individuals. d. In criminal proceedings, only one claim may be heard at a time. ANSWER: b FEEDBACK: a. Incorrect. A crime is considered an offense against society. b. Correct. In a criminal proceeding, the consequences are jail and/or fines. c. Incorrect. A criminal jury consists of 12 jurors. d. Incorrect. Only one claim is heard at a time, whereas in a civil case many claims may be joined into a single case. POINTS: 1 DIFFICULTY: easy REFERENCES: Criminal Law QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil fraud laws. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:36 AM DATE MODIFIED: 2/9/2024 6:38 AM Chapter 01 - The Nature of Fraud Page 3 5. Management fraud is often referred to as: a. stockholder fraud. b. financial statement fraud. c. employee fraud. d. investment fraud. ANSWER: b FEEDBACK: a. Incorrect. In its most common form, management fraud involves top management's deceptive manipulation of financial statements. b. Correct. In its most common form, management fraud involves top management's deceptive manipulation of financial statements. c. Incorrect. In its most common form, management fraud involves top management's deceptive manipulation of financial statements. d. Incorrect. In its most common form, management fraud involves top management's deceptive manipulation of financial statements. POINTS: 1 DIFFICULTY: easy REFERENCES: Management Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:39 AM DATE MODIFIED: 2/9/2024 6:43 AM 6. What is required to prove fraud, as opposed to error? a. Negligence b. Intent c. Preponderance of the evidence d. Confession from the perpetrator ANSWER: b FEEDBACK: a. Incorrect. Negligence does not constitute fraud because it lacks intent to gain advantage over the victim through false pretenses. b. Correct. To succeed in a criminal or civil prosecution, it is usually necessary to show that the perpetrator acted with intent to defraud the victim. c. Incorrect. Preponderance of the evidence is what is proven in any civil case and is not specific to fraud. d. Incorrect. Confession is not required to prove fraud. In fact, many perpetrators never admit their guilt. POINTS: 1 DIFFICULTY: moderate REFERENCES: Criminal and Civil Prosecution of Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil fraud laws. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:43 AM Chapter 01 - The Nature of Fraud Page 4 DATE MODIFIED: 2/9/2024 6:44 AM 7. Which of the following is the most common type of occupational fraud? a. Management fraud b. Mail fraud c. Investment fraud d. Employee embezzlement ANSWER: d FEEDBACK: a. Incorrect. Employee embezzlement is the most common type of occupational fraud. b. Incorrect. Employee embezzlement is the most common type of occupational fraud. c. Incorrect. Employee embezzlement is the most common type of occupational fraud. d. Correct. Employee embezzlement is the most common type of occupational fraud. POINTS: 1 DIFFICULTY: Easy REFERENCES: Employee Embezzlement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:45 AM DATE MODIFIED: 2/9/2024 6:47 AM 8. Which of the following is NOT a characteristic of management fraud? a. Top management deception b. Manipulation of financial statements c. Kickbacks or bribes d. Hidden losses and fictitious revenues ANSWER: c FEEDBACK: a. Incorrect. Management fraud often involves top management's deceptive manipulation. Management fraud is when the top management deceives stockholders. b. Incorrect. Management often uses the manipulation of financial statements to commit fraud. This is one of the easiest ways to commit a large fraud. c. Correct. These are examples of employee embezzlement. Management fraud usually deals with financial statement manipulation. d. Incorrect. In an effort to inflate reportable profit, managers may hide losses and exaggerate revenues. POINTS: 1 DIFFICULTY: easy REFERENCES: Management Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False Chapter 01 - The Nature of Fraud Page 5 LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:48 AM DATE MODIFIED: 2/9/2024 6:49 AM 9. Customer fraud includes all of the following EXCEPT: a. paying too little for goods received. b. not paying for goods purchased. c. receiving improper payments through collusion between buyers and vendors. d. deceiving the organization into giving the customer something that it should not. ANSWER: c FEEDBACK: a. Incorrect. Paying too little for goods received is an example of customer fraud. b. Incorrect. This is an example of customer fraud. c. Correct. This is an example of vendor fraud. d. Incorrect. This is an example of customer fraud. POINTS: 1 DIFFICULTY: easy REFERENCES: Customer Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. OTHER: Source: 6erevised DATE CREATED: 2/9/2024 6:50 AM DATE MODIFIED: 2/9/2024 6:51 AM 10. Which of the following is a frequently involved in of vendor fraud? a. C Participation of buyers from the company being defrauded b. False financial statement reporting by upper management c. Physical removal of inventory from the business premises d. Diversion of funds by an employee. manipulation ANSWER: a FEEDBACK: a. Correct. Vendor fraud frequently involves participation of buyers from the company being defrauded. b. Incorrect. Vendor fraud frequently involves participation of buyers from the company being defrauded. c. Incorrect. Vendor fraud frequently involves participation of buyers from the company being defrauded. d. Incorrect. Vendor fraud frequently involves participation of buyers from the company being defrauded. POINTS: 1 DIFFICULTY: moderate REFERENCES: Vendor Fraud QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud. Chapter 01 - The Nature of Fraud Page 6 OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:52 AM DATE MODIFIED: 2/9/2024 6:54 AM 11. Government agencies such as the FBI, FDIC, FTC, and the IRS publish fraud statistics from time to time. Which of the following observations concerning such statistics is true? a. Generally, their statistics are complete. b. Such information is rarely used. c. They provide only those statistics related to their jurisdiction. d. They usually provide a total picture in the areas for which they have responsibility. ANSWER: c FEEDBACK: a. Incorrect. Government agencies only publish those statistics that are directly related to their jurisdictions. As a result, their statistics are not complete and do not provide a total picture of fraud—even in the areas for which they have responsibility. b. Incorrect. Government agencies only publish those statistics that are directly related to their jurisdictions. As a result, their statistics are not complete and do not provide a total picture of fraud—even in the areas for which they have responsibility. c. Correct. Government agencies only publish those statistics that are directly related to their jurisdictions. As a result, their statistics are not complete and do not provide a total picture of fraud—even in the areas for which they have responsibility. d. Incorrect. Government agencies only publish those statistics that are directly related to their jurisdictions. As a result, their statistics are not complete and do not provide a total picture of fraud—even in the areas for which they have responsibility. POINTS: 1 DIFFICULTY: moderate REFERENCES: Seriousness of the Fraud Problem QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects individuals, consumers, organizations, and society. OTHER: Source: 6e revised DATE CREATED: 2/9/2024 6:54 AM DATE MODIFIED: 2/9/2024 6:56 AM 12. Which legal code makes the bribing of public officials and witnesses illegal? a. Title 18, U.S. Code §201 b. Title 41, U.S. Code §51 to 58 c. Title 18, U.S. Code Section §1341 d. Title 18, U.S. Code Section §1344 ANSWER: a FEEDBACK: a. Correct. Title 18, U.S. Code Section 201 outlaws the bribing of public officials. b. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of public officials. c. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of public officials. Chapter 01 - The Nature of Fraud Page 7 d. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of public officials. POINTS: 1