TEST BANK
TEST BANK
,Fraud Examination 6th Edition Albrecht Test Bank
Chapter 02
Multiple Choice
1. Which of the following is NOT a primary control procedure to minimize the occurrence of fraud?
a. Dual custody
b. System of authorizations
c. Internal audit department
d. Documents and records
ANSWER: c
RATIONALE: a. Incorrect. Dual custody, or segregation of duties, is one of the five primary control
activities.
b. Incorrect. A system of authorizations is one of the five primary control activities.
c. Correct. An internal audit department is an important element of the control
environment but not a control procedure.
d. Incorrect. Documents and records make up one of the five primary control activities
—they produce an audit trail.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.6
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
2. Which of the following is NOT a common rationalization of fraud perpetrators?
a. The organization owes me.
b. I'm only borrowing the money.
c. No one will get hurt.
d. No one will care.
ANSWER: d
RATIONALE: a. Incorrect. This is a common rationalization for committing fraud.
b. Incorrect. This is a common rationalization for committing fraud.
c. Incorrect. This is a common rationalization for committing fraud.
d. Correct. Fraud perpetrators usually rationalize their actions by thinking “I deserve
more.”
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.7
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 1
Visit TestBankDeal.com to get complete for all chapters
,Chapter 02
3. Which of the following is NOT an example of a control weakness or violation?
a. The HR department failed to check an applicant's background and hired someone who had committed fraud in
the past.
b. A manager instructs employees not to share passwords, and then shares her passwords with her immediate
assistant.
c. A company has established codes of conduct and conducts training meetings to teach employees to distinguish
between acceptable and unacceptable behavior. Attendance is voluntary.
d. The employees know who has responsibility for each business activity. Procedures to follow are in place.
ANSWER: d
RATIONALE: a. Incorrect. This is an example of a control violation.
b. Incorrect. This is an example of a control violation.
c. Incorrect. This is an example of a control weakness.
d. Correct. A clear organizational structure is an important fraud-deterring element. It is
easier to track missing assets and money when all employees know exactly who is
responsible for each business activity.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.6
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
4. A fraud perpetrator used the float time between banks to give the impression that he had money in his accounts.
Which crime is he committing?
a. Floating
b. Strip
c. Spinning
d. Kiting
ANSWER: d
RATIONALE: a. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
b. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
c. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
d. Correct. Kiting is using the float time between banks to give the impression of having
money in one's bank accounts.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.5
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 2
, Chapter 02
5. Which of the following observations is true?
a. Research shows that only people with a criminal mindset commit fraud.
b. Fraud perpetrators usually can be distinguished from others based on psychological characteristics.
c. Most fraud perpetrators have profiles that are similar to those of other people.
d. When fraud does occur, the most common initial reaction by those involved in the fraud is confession.
ANSWER: c
RATIONALE: a. Incorrect. Research shows that anyone can commit fraud.
b. Incorrect. Fraud perpetrators usually can’t be distinguished from other people on the
basis of demographic or psychological characteristics.
c. Correct. Fraud perpetrators usually can’t be distinguished from other people on the
basis of demographic or psychological characteristics.
d. Incorrect. When fraud does occur, the most common reaction by those around the
fraud is denial.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.1
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
6. When management fraud occurs, companies usually:
a. overstate assets and net income.
b. understate assets and net income.
c. overstate assets and understate net income.
d. understate assets and overstate net income.
ANSWER: a
RATIONALE: a. Correct. Usually, when management fraud occurs, companies overstate assets on the
balance sheet and net income on the income statement.
b. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
c. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
d. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.5
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 3
TEST BANK
,Fraud Examination 6th Edition Albrecht Test Bank
Chapter 02
Multiple Choice
1. Which of the following is NOT a primary control procedure to minimize the occurrence of fraud?
a. Dual custody
b. System of authorizations
c. Internal audit department
d. Documents and records
ANSWER: c
RATIONALE: a. Incorrect. Dual custody, or segregation of duties, is one of the five primary control
activities.
b. Incorrect. A system of authorizations is one of the five primary control activities.
c. Correct. An internal audit department is an important element of the control
environment but not a control procedure.
d. Incorrect. Documents and records make up one of the five primary control activities
—they produce an audit trail.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.6
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
2. Which of the following is NOT a common rationalization of fraud perpetrators?
a. The organization owes me.
b. I'm only borrowing the money.
c. No one will get hurt.
d. No one will care.
ANSWER: d
RATIONALE: a. Incorrect. This is a common rationalization for committing fraud.
b. Incorrect. This is a common rationalization for committing fraud.
c. Incorrect. This is a common rationalization for committing fraud.
d. Correct. Fraud perpetrators usually rationalize their actions by thinking “I deserve
more.”
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.7
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 1
Visit TestBankDeal.com to get complete for all chapters
,Chapter 02
3. Which of the following is NOT an example of a control weakness or violation?
a. The HR department failed to check an applicant's background and hired someone who had committed fraud in
the past.
b. A manager instructs employees not to share passwords, and then shares her passwords with her immediate
assistant.
c. A company has established codes of conduct and conducts training meetings to teach employees to distinguish
between acceptable and unacceptable behavior. Attendance is voluntary.
d. The employees know who has responsibility for each business activity. Procedures to follow are in place.
ANSWER: d
RATIONALE: a. Incorrect. This is an example of a control violation.
b. Incorrect. This is an example of a control violation.
c. Incorrect. This is an example of a control weakness.
d. Correct. A clear organizational structure is an important fraud-deterring element. It is
easier to track missing assets and money when all employees know exactly who is
responsible for each business activity.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.6
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
4. A fraud perpetrator used the float time between banks to give the impression that he had money in his accounts.
Which crime is he committing?
a. Floating
b. Strip
c. Spinning
d. Kiting
ANSWER: d
RATIONALE: a. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
b. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
c. Incorrect. Kiting is using the float time between banks to give the impression of
having money in one's bank accounts.
d. Correct. Kiting is using the float time between banks to give the impression of having
money in one's bank accounts.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.5
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 2
, Chapter 02
5. Which of the following observations is true?
a. Research shows that only people with a criminal mindset commit fraud.
b. Fraud perpetrators usually can be distinguished from others based on psychological characteristics.
c. Most fraud perpetrators have profiles that are similar to those of other people.
d. When fraud does occur, the most common initial reaction by those involved in the fraud is confession.
ANSWER: c
RATIONALE: a. Incorrect. Research shows that anyone can commit fraud.
b. Incorrect. Fraud perpetrators usually can’t be distinguished from other people on the
basis of demographic or psychological characteristics.
c. Correct. Fraud perpetrators usually can’t be distinguished from other people on the
basis of demographic or psychological characteristics.
d. Incorrect. When fraud does occur, the most common reaction by those around the
fraud is denial.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.1
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
6. When management fraud occurs, companies usually:
a. overstate assets and net income.
b. understate assets and net income.
c. overstate assets and understate net income.
d. understate assets and overstate net income.
ANSWER: a
RATIONALE: a. Correct. Usually, when management fraud occurs, companies overstate assets on the
balance sheet and net income on the income statement.
b. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
c. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
d. Incorrect. Usually, when management fraud occurs, companies overstate assets on
the balance sheet and net income on the income statement.
POINTS: 1
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.19.2.5
DATE CREATED: 3/15/2018 9:58 PM
DATE MODIFIED: 3/20/2018 8:09 AM
Copyright Cengage Learning. Powered by Cognero. Page 3
