ACCT 418-151 Test 1 With Valid
Answers
What bis bFraud bExamination? b- bCORRECT✅✅A bprocess bof bresolving ballegations
bof bfraud bfrom binception bto bdisposition.
What bis bthe bfraud btheory bapproach? b- bCORRECT✅✅The bfraud btheory bapproach
bis bthe bmethodology bused bfor bresolving ballegations bof bfraud bby bdeveloping ba
bworst-case bscenario bof bwhat bcould bhave boccurred, bthen battempting bto bconfirm bor
brefute bthat btheory.
Occupational bfraud band babuse binclude bany bpersonal benrichment bthat bresults bfrom
bmisuse bor bmisapplication bof bemploying borganization's bresources bor bassets. bThere
bare bfour bkey belements, bwhat bare bthey? b- bCORRECT✅✅That bit:
1) bis bclandestine b
2) bviolates bthe bemployees' bfiduciary bduties bto bthe borganization
3) bis bcommitted bfor bthe bpurpose bof bdirect bor bindirect bfinancial bbenefit bto bthe
bemployee b
4) bcosts bthe bemploying borganization bits bassets, brevenues, bor breserves.
Under bthe bcommon blaw, bfraud bgenerally bconsists bof bfour belements ball bof bwhich
bmust bbe bpresent. bList bthese: b- bCORRECT✅✅1) ba bmaterially bfalse bstatement b
2) bknowledge bthat bthe bstatement bwas bfalse bwhen bit bwas buttered b
3) breliance bof bthe bfalse bstatement bby bthe bvictim, band b
4) bdamages bas ba bresult.
What bis bthe bdifference bbetween boccupational bfraud band boccupational babuse? bGive
bexamples: b- bCORRECT✅✅Fraud: btends bto bbe bmore bcostly band bless bcommon
bthan babuse. bActions bsuch bas basset bmisappropriations, bcorruption, band bfraudulent
bfinancial bstatements. b
Abuse: bconsists bof bpetty boffenses bsuch bas btaking bextended blunch bbreaks, bshowing
bup blate bfor bwork, band bdoing bslow bor bsloppy bwork.
Edwin bH. bSutherland, ba bcriminologist, bcoined bthe bphrase b"white-collar bcrime."
bWhat bdid bhe bmean bby bthis bterm? bHow bhas bthe bmeaning bof bthis bphrase bchanged
bover btime? b- bCORRECT✅✅Sutherland bcoined bthe bterm b"white-collar bcrime" bto
bdescribe bcriminal bacts bof bcorporations band bindividuals bacting bin btheir bcorporate
bcapacity b(e.g., bcrime bin bthe bexecutive bsuite). bOver btime, bthe bterm bhas bcome bto
bencompass balmost bany bfinancial bor beconomic bcrime, bfrom bthe bmailroom bto bthe
bboardroom.
,Sutherland bdeveloped bwhat bis bknown bas bthe b"theory bof bdifferential bassociation."
bWhat bis bthe bprincipal btenet bof bhis btheory? b- bCORRECT✅✅The btheory bof
bdifferential bassociation's bprincipal btenet bis bthat bcrime bis blearned. bSutherland
bbelieved bthat bthis blearning btypically boccurred bin bintimate bpersonal bgroups.
Cressey binterviewed bnearly b200 bembezzlers bin border bto bdevelop bhis btheory bon bthe
bcausation bof bfraud. bAs ba bresult bof bhis bresearch, bwhat bwas bCressey's bfinal-
hypothesis? b- bCORRECT✅✅Trusted bpersons bbecome btrust bviolators bwhen bthey
bconceive bof bthemselves bas bhaving ba bfinancial bproblem bwhich bis bnon-shareable,
bare baware bthis bproblem bcan bbe bsecretly bresolved bby bviolation bof bthe bposition bof
bfinancial btrust, band bare bable bto bapply bto btheir bown bconduct bin bthat bsituation
bverbalizations bwhich benable bthem bto badjust btheir bconceptions bof bthemselves bas
btrusted bpersons bwith btheir bconceptions bof bthemselves bas busers bof bthe bentrusted
bproperty."
Cressey bbelieved bthat bnon-shareable bproblems bprovided bthe bmotivation bfor
bemployees bto bcommit boccupational bfraud. bWhat bdid bhe bmean bby b"non-
shareable"? b- bCORRECT✅✅Cressey bmeant bthat bthe bproblems, bat bleast bin bthe
beyes bof bthe bpotential boffenders, bmust bbe bkept bsecret bfrom bothers, bso bas bto
bavoid bembarrassment bor, bmore bimportantly, ba bloss bof bstatus.
Cressey bdivided bthe bnon-shareable bproblems bof bthe bsubjects bin bhis bresearch binto
bsix bdifferent bsubtypes. bWhat bare bthey? b- bCORRECT✅✅(1) bviolation bof bascribed
bobligations, b
(2) bproblems bresulting bfrom bpersonal bfailure, b
(3) bbusiness breversals, b(4) bphysical bisolation, b
(5) bstatus bgaining, band b(6) bemployer-employee brelations.
lbrecht bconcluded bthat bthere bwere bthree bfactors bthat bled bto boccupational bfraud.
bWhat bare bthey? b- bCORRECT✅✅lbrecht's blist bis bvery bsimilar bto bthe bfraud
btriangle. bThe bthree bfactors bhe bidentified bare b(1) bsituational bpressures, b(2)
bopportunities, band b(3) bpersonal bintegrity.
What bfactor bdid bHollinger band bClark bidentify bas bthe bprimary bcause bof bemployee
bdeviance? b- bCORRECT✅✅The bresearch bof bHollinger band bClark bstrongly
bsuggests bthat bjob bdissatisfaction bamong bemployees—across ball bage bgroups bbut
bespecially byounger bworkers—is bthe bmost blikely bcause bof bcounterproductive bor
billegal bbehavior bin bthe bworkplace.
The b2011 bGlobal bFraud bSurvey bcovered ba bnumber bof bfactors bthat bare brelated bto
boccupational bfraud. bList bthese bfactors. b- bCORRECT✅✅(1) bthe bcost bof bfraud band
babuse, b
(2) bposition, bgender, btenure, band bcriminal bhistory bof bthe bperpetrator, b
(3) bsize bof bthe bvictim borganization, b
(4) bactions btaken bagainst boccupational bfraudsters bby btheir bvictims, b
(5) bmethods bby bwhich boccupational bfrauds bwere bdetected, b
, (6) bcommonness bof bschemes, band b
(7) bcosts bassociated bwith bvarious bschemes.
How bdoes b"fraud bexamination" bdiffer bfrom b"forensic baccounting"? b-
bCORRECT✅✅Fraud bexamination bis ba bprocess bused bto bresolve ballegations bof
bfraud bfrom binception btodisposition. b
Forensic baccounting bis bany baccounting bwork bdone bin banticipation bof blitigation.
There bare bseveral bsteps binvolved bin bthe bfraud btheory bapproach. bWhat bare bthey? b-
bCORRECT✅✅The bfraud btheory bapproach binvolves b
1) banalyzing bthe bavailable bevidence, bdeveloping ba btheory bof bwhat bfraud bcould
bhave boccurred bbased bon ba bworst-case bscenario, btesting bthe btheory, b
2) brevising bit bor bamending bit bas bnecessary, b
3) bthen bproving bthe btheory bthrough badditional binvestigative bwork.
How bis b"skimming" bdefined? b- bCORRECT✅✅Skimming bis bthe btheft bof bcash bfrom
ba bvictim borganization bprior bto bits bentry bin bthe borganization's baccounting bsystem.
What bare bthe btwo bprincipal bcategories bof bskimming? b- bCORRECT✅✅Skimming
bschemes bcan bbe bsubdivided bbased bon bwhether bthey btarget bsales bor breceivables.
bThe bcharacter bof bthe bincoming bfunds bhas ban beffect bon bhow bthe bfrauds bare
bconcealed, band bconcealment bis bthe bcrucial belement bof bmost boccupational bfraud
bschemes.
How bdo bsales bskimming bschemes bleave ba bvictim borganization's bbooks bin bbalance,
bdespite bthe btheft bof bfunds? b- bCORRECT✅✅When ban bemployee bskims bmoney
bby bmaking boff-book bsales bof bmerchandise, bneither bthe bsales btransaction bnor bthe
bincoming bcash bis bever brecorded. bFor bexample, bsuppose ba bcash bregister bclerk
bskims b$500 bin breceipts bfrom bone bsale bof bgoods. bAt bthe bend bof bthe bday, bhis
bcash bdrawer bwill bbe bshort bby b$500—the bamount bof bmoney bthat bwas bstolen. bBut
bbecause bthe bsale bwas bnever brecorded, bthe bsales brecords bwill bbe bunderstated bby
b$500. bTherefore, bthe bbooks bwill bremain bimbalance.
Under bwhat bcircumstances bare bincoming bchecks breceived bthrough bthe bmail
btypically bstolen? b- bCORRECT✅✅Checks bare bnormally bstolen bwhen ba bsingle
bemployee bis bin bcharge bof bopening bthe bmail band bpreparing bthe bdeposit. bThe
bemployee bsimply bremoves bthe bcheck bfrom bthe bincoming bmail band bforges bthe
bendorsement bof bthe bemployer, bthen bendorses bit bwith bhis bor bher bown bname band
bcashes bor bdeposits bit.
How bdo b"understated bsales" bschemes bdiffer bfrom b"unrecorded bsales"? b-
bCORRECT✅✅Unrecorded bsales bschemes bare bpurely boff-book btransactions.
bUnderstated bsales, bon bthe bother bhand, bare bposted bto bthe bvictim borganization's
bbooks, bbut bfor ba blower bamount bthan bwhat bthe bperpetrator bcollected bfrom bthe
bcustomer. bTypically, bthe bperpetrator bwill bunderstate ba bsale bby brecording ba blower
Answers
What bis bFraud bExamination? b- bCORRECT✅✅A bprocess bof bresolving ballegations
bof bfraud bfrom binception bto bdisposition.
What bis bthe bfraud btheory bapproach? b- bCORRECT✅✅The bfraud btheory bapproach
bis bthe bmethodology bused bfor bresolving ballegations bof bfraud bby bdeveloping ba
bworst-case bscenario bof bwhat bcould bhave boccurred, bthen battempting bto bconfirm bor
brefute bthat btheory.
Occupational bfraud band babuse binclude bany bpersonal benrichment bthat bresults bfrom
bmisuse bor bmisapplication bof bemploying borganization's bresources bor bassets. bThere
bare bfour bkey belements, bwhat bare bthey? b- bCORRECT✅✅That bit:
1) bis bclandestine b
2) bviolates bthe bemployees' bfiduciary bduties bto bthe borganization
3) bis bcommitted bfor bthe bpurpose bof bdirect bor bindirect bfinancial bbenefit bto bthe
bemployee b
4) bcosts bthe bemploying borganization bits bassets, brevenues, bor breserves.
Under bthe bcommon blaw, bfraud bgenerally bconsists bof bfour belements ball bof bwhich
bmust bbe bpresent. bList bthese: b- bCORRECT✅✅1) ba bmaterially bfalse bstatement b
2) bknowledge bthat bthe bstatement bwas bfalse bwhen bit bwas buttered b
3) breliance bof bthe bfalse bstatement bby bthe bvictim, band b
4) bdamages bas ba bresult.
What bis bthe bdifference bbetween boccupational bfraud band boccupational babuse? bGive
bexamples: b- bCORRECT✅✅Fraud: btends bto bbe bmore bcostly band bless bcommon
bthan babuse. bActions bsuch bas basset bmisappropriations, bcorruption, band bfraudulent
bfinancial bstatements. b
Abuse: bconsists bof bpetty boffenses bsuch bas btaking bextended blunch bbreaks, bshowing
bup blate bfor bwork, band bdoing bslow bor bsloppy bwork.
Edwin bH. bSutherland, ba bcriminologist, bcoined bthe bphrase b"white-collar bcrime."
bWhat bdid bhe bmean bby bthis bterm? bHow bhas bthe bmeaning bof bthis bphrase bchanged
bover btime? b- bCORRECT✅✅Sutherland bcoined bthe bterm b"white-collar bcrime" bto
bdescribe bcriminal bacts bof bcorporations band bindividuals bacting bin btheir bcorporate
bcapacity b(e.g., bcrime bin bthe bexecutive bsuite). bOver btime, bthe bterm bhas bcome bto
bencompass balmost bany bfinancial bor beconomic bcrime, bfrom bthe bmailroom bto bthe
bboardroom.
,Sutherland bdeveloped bwhat bis bknown bas bthe b"theory bof bdifferential bassociation."
bWhat bis bthe bprincipal btenet bof bhis btheory? b- bCORRECT✅✅The btheory bof
bdifferential bassociation's bprincipal btenet bis bthat bcrime bis blearned. bSutherland
bbelieved bthat bthis blearning btypically boccurred bin bintimate bpersonal bgroups.
Cressey binterviewed bnearly b200 bembezzlers bin border bto bdevelop bhis btheory bon bthe
bcausation bof bfraud. bAs ba bresult bof bhis bresearch, bwhat bwas bCressey's bfinal-
hypothesis? b- bCORRECT✅✅Trusted bpersons bbecome btrust bviolators bwhen bthey
bconceive bof bthemselves bas bhaving ba bfinancial bproblem bwhich bis bnon-shareable,
bare baware bthis bproblem bcan bbe bsecretly bresolved bby bviolation bof bthe bposition bof
bfinancial btrust, band bare bable bto bapply bto btheir bown bconduct bin bthat bsituation
bverbalizations bwhich benable bthem bto badjust btheir bconceptions bof bthemselves bas
btrusted bpersons bwith btheir bconceptions bof bthemselves bas busers bof bthe bentrusted
bproperty."
Cressey bbelieved bthat bnon-shareable bproblems bprovided bthe bmotivation bfor
bemployees bto bcommit boccupational bfraud. bWhat bdid bhe bmean bby b"non-
shareable"? b- bCORRECT✅✅Cressey bmeant bthat bthe bproblems, bat bleast bin bthe
beyes bof bthe bpotential boffenders, bmust bbe bkept bsecret bfrom bothers, bso bas bto
bavoid bembarrassment bor, bmore bimportantly, ba bloss bof bstatus.
Cressey bdivided bthe bnon-shareable bproblems bof bthe bsubjects bin bhis bresearch binto
bsix bdifferent bsubtypes. bWhat bare bthey? b- bCORRECT✅✅(1) bviolation bof bascribed
bobligations, b
(2) bproblems bresulting bfrom bpersonal bfailure, b
(3) bbusiness breversals, b(4) bphysical bisolation, b
(5) bstatus bgaining, band b(6) bemployer-employee brelations.
lbrecht bconcluded bthat bthere bwere bthree bfactors bthat bled bto boccupational bfraud.
bWhat bare bthey? b- bCORRECT✅✅lbrecht's blist bis bvery bsimilar bto bthe bfraud
btriangle. bThe bthree bfactors bhe bidentified bare b(1) bsituational bpressures, b(2)
bopportunities, band b(3) bpersonal bintegrity.
What bfactor bdid bHollinger band bClark bidentify bas bthe bprimary bcause bof bemployee
bdeviance? b- bCORRECT✅✅The bresearch bof bHollinger band bClark bstrongly
bsuggests bthat bjob bdissatisfaction bamong bemployees—across ball bage bgroups bbut
bespecially byounger bworkers—is bthe bmost blikely bcause bof bcounterproductive bor
billegal bbehavior bin bthe bworkplace.
The b2011 bGlobal bFraud bSurvey bcovered ba bnumber bof bfactors bthat bare brelated bto
boccupational bfraud. bList bthese bfactors. b- bCORRECT✅✅(1) bthe bcost bof bfraud band
babuse, b
(2) bposition, bgender, btenure, band bcriminal bhistory bof bthe bperpetrator, b
(3) bsize bof bthe bvictim borganization, b
(4) bactions btaken bagainst boccupational bfraudsters bby btheir bvictims, b
(5) bmethods bby bwhich boccupational bfrauds bwere bdetected, b
, (6) bcommonness bof bschemes, band b
(7) bcosts bassociated bwith bvarious bschemes.
How bdoes b"fraud bexamination" bdiffer bfrom b"forensic baccounting"? b-
bCORRECT✅✅Fraud bexamination bis ba bprocess bused bto bresolve ballegations bof
bfraud bfrom binception btodisposition. b
Forensic baccounting bis bany baccounting bwork bdone bin banticipation bof blitigation.
There bare bseveral bsteps binvolved bin bthe bfraud btheory bapproach. bWhat bare bthey? b-
bCORRECT✅✅The bfraud btheory bapproach binvolves b
1) banalyzing bthe bavailable bevidence, bdeveloping ba btheory bof bwhat bfraud bcould
bhave boccurred bbased bon ba bworst-case bscenario, btesting bthe btheory, b
2) brevising bit bor bamending bit bas bnecessary, b
3) bthen bproving bthe btheory bthrough badditional binvestigative bwork.
How bis b"skimming" bdefined? b- bCORRECT✅✅Skimming bis bthe btheft bof bcash bfrom
ba bvictim borganization bprior bto bits bentry bin bthe borganization's baccounting bsystem.
What bare bthe btwo bprincipal bcategories bof bskimming? b- bCORRECT✅✅Skimming
bschemes bcan bbe bsubdivided bbased bon bwhether bthey btarget bsales bor breceivables.
bThe bcharacter bof bthe bincoming bfunds bhas ban beffect bon bhow bthe bfrauds bare
bconcealed, band bconcealment bis bthe bcrucial belement bof bmost boccupational bfraud
bschemes.
How bdo bsales bskimming bschemes bleave ba bvictim borganization's bbooks bin bbalance,
bdespite bthe btheft bof bfunds? b- bCORRECT✅✅When ban bemployee bskims bmoney
bby bmaking boff-book bsales bof bmerchandise, bneither bthe bsales btransaction bnor bthe
bincoming bcash bis bever brecorded. bFor bexample, bsuppose ba bcash bregister bclerk
bskims b$500 bin breceipts bfrom bone bsale bof bgoods. bAt bthe bend bof bthe bday, bhis
bcash bdrawer bwill bbe bshort bby b$500—the bamount bof bmoney bthat bwas bstolen. bBut
bbecause bthe bsale bwas bnever brecorded, bthe bsales brecords bwill bbe bunderstated bby
b$500. bTherefore, bthe bbooks bwill bremain bimbalance.
Under bwhat bcircumstances bare bincoming bchecks breceived bthrough bthe bmail
btypically bstolen? b- bCORRECT✅✅Checks bare bnormally bstolen bwhen ba bsingle
bemployee bis bin bcharge bof bopening bthe bmail band bpreparing bthe bdeposit. bThe
bemployee bsimply bremoves bthe bcheck bfrom bthe bincoming bmail band bforges bthe
bendorsement bof bthe bemployer, bthen bendorses bit bwith bhis bor bher bown bname band
bcashes bor bdeposits bit.
How bdo b"understated bsales" bschemes bdiffer bfrom b"unrecorded bsales"? b-
bCORRECT✅✅Unrecorded bsales bschemes bare bpurely boff-book btransactions.
bUnderstated bsales, bon bthe bother bhand, bare bposted bto bthe bvictim borganization's
bbooks, bbut bfor ba blower bamount bthan bwhat bthe bperpetrator bcollected bfrom bthe
bcustomer. bTypically, bthe bperpetrator bwill bunderstate ba bsale bby brecording ba blower
