Fraud Examination Chapters 1-18 for
Final Exam correctly answered to pass
Perpetrators - correct answer ✔✔persons who commit a fraud
Jurisdiction - correct answer ✔✔the limit or territory over which an organization has authority
Victims - correct answer ✔✔a person or organization deceived by the perpetrator
Association of Certified Fraud Examiners (ACFE) - correct answer ✔✔the world's largest anti-
fraud organization that regularly conducts one of the most comprehensive fraud studies in the
United States
Net Income - correct answer ✔✔an overall measure of the performance of a company; equal to
revenues minus expenses for a period
Revenue - correct answer ✔✔increases in a company's resources from the sale of goods or
services
Profit Margin - correct answer ✔✔net income divided by total revenues; also known as return
on sales, profit margin percentage, profit margin ration, and operating performance ratio
Fraud - correct answer ✔✔all of the multifarious means which humans ingenuity can devise,
which are resorted to by one individual, to get an advantage over another by false
representations
,Financial Statement - correct answer ✔✔reports such as the balance sheet, income statement,
and statement of cash flows that summarize the financial status and results of operations of a
business entity
Miscellaneous Fraud - correct answer ✔✔a fraud that may have been committed for reasons
other than financial gain and does not include employee embezzlement, vendor fraud,
customer fraud, management fraud, investment scams, and other consumer frauds.
Employee Embezzlement - correct answer ✔✔the most common type of occupational fraud,
where employees deceive their employers by taking company assets. It can be either direct or
indirect.
Vendor Fraud - correct answer ✔✔is extremely common in the United States, and comes in 2
forms: (1) fraud perpetrated by vendors acting alone and (2) fraud perpetrated by through
collusion between buyers and vendors
Customer Fraud - correct answer ✔✔occurs when customers either do not pay for goods
purchased, they pay too little, or they get something for nothing
Management Fraud - correct answer ✔✔Involves top management's deceptive manipulation of
financial statements
Investment Scams - correct answer ✔✔occur when fraudulent and usually worthless
investments are sold to unsuspecting investors
Evidential Matter - correct answer ✔✔the underlying data and all corroborating information
available about a fraud
Criminal Law - correct answer ✔✔the branch of law that deals with offenses of a public nature;
generally offenses against society as a whole
,Statute - correct answer ✔✔a law or regulation; a law enacted by the legislative branch of a
government
Civil Law - correct answer ✔✔the body of law that provides remedies for violations of private
rights. It deals with rights of individuals
(T/F) All frauds that are detected by organizations are made public - correct answer ✔✔False
(T/F) Perpetrators use trickery, confidence, and deception to commit fraud. - correct answer
✔✔True
(T/F) One of the most common responses to fraud is disbelief by those around the fraud -
correct answer ✔✔True
(T/F) Manufacturing companies with a profit margin of 10% must usually generate about 10
times as much revenue as the dollar amount of the fraud in order to restore their net income. -
correct answer ✔✔True
(T/F) Fraud involves using physical force to take something from someone. - correct answer
✔✔False, that is describing robbery
(T/F) Identity theft is an example of employee embezzlement - correct answer ✔✔False
(T/F) When perpetrators are criminally convicted of fraud, they often serve jail sentences and/or
pay fines. - correct answer ✔✔True
(T/F) Management fraud is deception perpetrated by an organization's top management -
correct answer ✔✔True
, (T/F) A Ponzi scheme is considered to be a type of investment scam - correct answer ✔✔True
(T/F) Most people agree that fraud-related careers will be in demand in the future - correct
answer ✔✔True
(T/F) In civil cases, fraud experts are rarely used as expert witnesses. - correct answer ✔✔False
(T/F) Many companies try to hide their losses from fraud rather than make them public - correct
answer ✔✔True
(T/F) The only group/business that must report employee embezzlement is the Federal
Government - correct answer ✔✔False, Banks are also required
(T/F) Advances in technology have had no effect either on the size or frequency of fraud or on
the detection or investigation of fraud. - correct answer ✔✔False
(T/F) Fraud losses generally reduce a firm's income on a dollar-for-dollar basis - correct answer
✔✔True
(T/F) The single most critical element for a fraud to be successful is opportunity - correct answer
✔✔False, the most critical is Confidence
(T/F) Fraud perpetrators are often those who are least suspected and most trusted - correct
answer ✔✔True
(T/F) Unintentional errors in financial statements are a form of fraud - correct answer ✔✔False
Final Exam correctly answered to pass
Perpetrators - correct answer ✔✔persons who commit a fraud
Jurisdiction - correct answer ✔✔the limit or territory over which an organization has authority
Victims - correct answer ✔✔a person or organization deceived by the perpetrator
Association of Certified Fraud Examiners (ACFE) - correct answer ✔✔the world's largest anti-
fraud organization that regularly conducts one of the most comprehensive fraud studies in the
United States
Net Income - correct answer ✔✔an overall measure of the performance of a company; equal to
revenues minus expenses for a period
Revenue - correct answer ✔✔increases in a company's resources from the sale of goods or
services
Profit Margin - correct answer ✔✔net income divided by total revenues; also known as return
on sales, profit margin percentage, profit margin ration, and operating performance ratio
Fraud - correct answer ✔✔all of the multifarious means which humans ingenuity can devise,
which are resorted to by one individual, to get an advantage over another by false
representations
,Financial Statement - correct answer ✔✔reports such as the balance sheet, income statement,
and statement of cash flows that summarize the financial status and results of operations of a
business entity
Miscellaneous Fraud - correct answer ✔✔a fraud that may have been committed for reasons
other than financial gain and does not include employee embezzlement, vendor fraud,
customer fraud, management fraud, investment scams, and other consumer frauds.
Employee Embezzlement - correct answer ✔✔the most common type of occupational fraud,
where employees deceive their employers by taking company assets. It can be either direct or
indirect.
Vendor Fraud - correct answer ✔✔is extremely common in the United States, and comes in 2
forms: (1) fraud perpetrated by vendors acting alone and (2) fraud perpetrated by through
collusion between buyers and vendors
Customer Fraud - correct answer ✔✔occurs when customers either do not pay for goods
purchased, they pay too little, or they get something for nothing
Management Fraud - correct answer ✔✔Involves top management's deceptive manipulation of
financial statements
Investment Scams - correct answer ✔✔occur when fraudulent and usually worthless
investments are sold to unsuspecting investors
Evidential Matter - correct answer ✔✔the underlying data and all corroborating information
available about a fraud
Criminal Law - correct answer ✔✔the branch of law that deals with offenses of a public nature;
generally offenses against society as a whole
,Statute - correct answer ✔✔a law or regulation; a law enacted by the legislative branch of a
government
Civil Law - correct answer ✔✔the body of law that provides remedies for violations of private
rights. It deals with rights of individuals
(T/F) All frauds that are detected by organizations are made public - correct answer ✔✔False
(T/F) Perpetrators use trickery, confidence, and deception to commit fraud. - correct answer
✔✔True
(T/F) One of the most common responses to fraud is disbelief by those around the fraud -
correct answer ✔✔True
(T/F) Manufacturing companies with a profit margin of 10% must usually generate about 10
times as much revenue as the dollar amount of the fraud in order to restore their net income. -
correct answer ✔✔True
(T/F) Fraud involves using physical force to take something from someone. - correct answer
✔✔False, that is describing robbery
(T/F) Identity theft is an example of employee embezzlement - correct answer ✔✔False
(T/F) When perpetrators are criminally convicted of fraud, they often serve jail sentences and/or
pay fines. - correct answer ✔✔True
(T/F) Management fraud is deception perpetrated by an organization's top management -
correct answer ✔✔True
, (T/F) A Ponzi scheme is considered to be a type of investment scam - correct answer ✔✔True
(T/F) Most people agree that fraud-related careers will be in demand in the future - correct
answer ✔✔True
(T/F) In civil cases, fraud experts are rarely used as expert witnesses. - correct answer ✔✔False
(T/F) Many companies try to hide their losses from fraud rather than make them public - correct
answer ✔✔True
(T/F) The only group/business that must report employee embezzlement is the Federal
Government - correct answer ✔✔False, Banks are also required
(T/F) Advances in technology have had no effect either on the size or frequency of fraud or on
the detection or investigation of fraud. - correct answer ✔✔False
(T/F) Fraud losses generally reduce a firm's income on a dollar-for-dollar basis - correct answer
✔✔True
(T/F) The single most critical element for a fraud to be successful is opportunity - correct answer
✔✔False, the most critical is Confidence
(T/F) Fraud perpetrators are often those who are least suspected and most trusted - correct
answer ✔✔True
(T/F) Unintentional errors in financial statements are a form of fraud - correct answer ✔✔False
