ACCT 460
Chapter 15 – Conducting Investigations and Report Writing
1. A company may need to undertake an internal investigation into alleged employee
fraud for which of the following reasons?
a. To mitigate the company’s vicarious liability for the wrongful conduct
b. To determine the source and amount of loss
c. To guard against wrongful termination accusations
d. All of the above
2. Officers and directors of companies are bound by the duties of and
in overseeing the operations of their companies.
a. loyalty; reasonable care
b. due process; loyalty
c. reasonable care; imputed practice
d. loyalty; implicit care
3. The failure to adequately investigate an allegation of employee fraud may be
a violation of legal and regulatory requirements.
a. True
b. False
4. When choosing a fraud examination team, it is important to include as many parties
as possible to ensure that all investigatory perspectives are covered.
a. True
b. False
5. In most cases, which of the following parties should be primarily responsible
for directing a fraud examination?
a. The external auditors
b. The head of the security department
c. The company’s legal counsel
d. The human resources manager
6. Fraud examination teams should be broken down into two segregated groups: one
that focuses on the financial side of the investigation and one that performs the
investigatory field work.
a. True
b. False
7. Which of the following factors should be considered when determining whether
to employ outside consultants during a fraud examination engagement?
a. Company politics
b. The degree of expertise required for specific tasks
c. Potential threats of retaliation against internal investigators
d. All of the above
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, 8. Which of the following statements is true regarding the use of undercover
operations as part of a fraud examination?
a. Undercover operations are never legal and should not be used in fraud
examinations.
b. Undercover operations should be used only if there is sufficient
probable cause that a crime has been committed.
c. There are no restrictions governing the use of undercover operations as part
of fraud investigations.
d. None of the above
9. Able is a fraud examiner who works for XYZ, a private company. While
investigating an allegation of employee embezzlement, Able calls Baker, a suspected
co- conspirator, and pretends to be a member of the local police force. Able tells
Baker that if he turns over his financial records to Able, that he will be provided
immunity from prosecution. Is Able’s use of impersonation in this situation legally
acceptable?
a. Yes
b. No
10. involves obtaining information through the use of falsehoods or
deception.
a. Pretexting
b. Subject manipulation
c. Forensic investigation
d. Surveillance
11. While investigating an alleged conflict of interest scheme, Green, an internal
investigator, is contacted by the ex-wife of Brown, the primary suspect. After calling
her ex-husband some unsavory names and telling Green that Brown hasn’t paid a
dime of his court-ordered alimony, the jilted former spouse informs Green that she
has some dirt on Brown. She tells Green that she’d be more than happy to spill the
beans about Brown’s misdeeds if Green can ensure that she receives half of any
money recovered as a result of the investigation. Because Brown’s ex-wife is clearly
seeking a financial reward for supplying information, Green should discontinue
speaking with her and should not rely on any information she provides.
a. True
b. False
12. Baker, CFE, is on a stakeout at the home of Potter, the prime suspect in a large false
billing scheme. When Baker arrives at Potter’s street, she notices Potter’s garbage
has been placed on the curb for pickup. Baker believes she could obtain much of the
information she needs by going through Potter’s garbage. In order to legally sift
through Potter’s trash and seize discarded documents to be used as evidence, Baker
must:
a. Obtain a search warrant
b. Obtain a subpoena duces tecum
c. Obtain Potter’s consent
This study source was downloaded by 100000844749689 from CourseHero.com on 05-03-2022 12:46:58 GMT -05:00
https://www.coursehero.com/file/11195591/ch15/
Chapter 15 – Conducting Investigations and Report Writing
1. A company may need to undertake an internal investigation into alleged employee
fraud for which of the following reasons?
a. To mitigate the company’s vicarious liability for the wrongful conduct
b. To determine the source and amount of loss
c. To guard against wrongful termination accusations
d. All of the above
2. Officers and directors of companies are bound by the duties of and
in overseeing the operations of their companies.
a. loyalty; reasonable care
b. due process; loyalty
c. reasonable care; imputed practice
d. loyalty; implicit care
3. The failure to adequately investigate an allegation of employee fraud may be
a violation of legal and regulatory requirements.
a. True
b. False
4. When choosing a fraud examination team, it is important to include as many parties
as possible to ensure that all investigatory perspectives are covered.
a. True
b. False
5. In most cases, which of the following parties should be primarily responsible
for directing a fraud examination?
a. The external auditors
b. The head of the security department
c. The company’s legal counsel
d. The human resources manager
6. Fraud examination teams should be broken down into two segregated groups: one
that focuses on the financial side of the investigation and one that performs the
investigatory field work.
a. True
b. False
7. Which of the following factors should be considered when determining whether
to employ outside consultants during a fraud examination engagement?
a. Company politics
b. The degree of expertise required for specific tasks
c. Potential threats of retaliation against internal investigators
d. All of the above
This study source was downloaded by 100000844749689 from CourseHero.com on 05-03-2022 12:46:58 GMT -05:00
https://www.coursehero.com/file/11195591/ch15/
, 8. Which of the following statements is true regarding the use of undercover
operations as part of a fraud examination?
a. Undercover operations are never legal and should not be used in fraud
examinations.
b. Undercover operations should be used only if there is sufficient
probable cause that a crime has been committed.
c. There are no restrictions governing the use of undercover operations as part
of fraud investigations.
d. None of the above
9. Able is a fraud examiner who works for XYZ, a private company. While
investigating an allegation of employee embezzlement, Able calls Baker, a suspected
co- conspirator, and pretends to be a member of the local police force. Able tells
Baker that if he turns over his financial records to Able, that he will be provided
immunity from prosecution. Is Able’s use of impersonation in this situation legally
acceptable?
a. Yes
b. No
10. involves obtaining information through the use of falsehoods or
deception.
a. Pretexting
b. Subject manipulation
c. Forensic investigation
d. Surveillance
11. While investigating an alleged conflict of interest scheme, Green, an internal
investigator, is contacted by the ex-wife of Brown, the primary suspect. After calling
her ex-husband some unsavory names and telling Green that Brown hasn’t paid a
dime of his court-ordered alimony, the jilted former spouse informs Green that she
has some dirt on Brown. She tells Green that she’d be more than happy to spill the
beans about Brown’s misdeeds if Green can ensure that she receives half of any
money recovered as a result of the investigation. Because Brown’s ex-wife is clearly
seeking a financial reward for supplying information, Green should discontinue
speaking with her and should not rely on any information she provides.
a. True
b. False
12. Baker, CFE, is on a stakeout at the home of Potter, the prime suspect in a large false
billing scheme. When Baker arrives at Potter’s street, she notices Potter’s garbage
has been placed on the curb for pickup. Baker believes she could obtain much of the
information she needs by going through Potter’s garbage. In order to legally sift
through Potter’s trash and seize discarded documents to be used as evidence, Baker
must:
a. Obtain a search warrant
b. Obtain a subpoena duces tecum
c. Obtain Potter’s consent
This study source was downloaded by 100000844749689 from CourseHero.com on 05-03-2022 12:46:58 GMT -05:00
https://www.coursehero.com/file/11195591/ch15/
