WGU D551 PRE-ASSESSMENT: FRAUD AND
FORENSIC ACCOUNTING COMPREHENSIVE
STUDY GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Statement on Auditing Standards (SAS) No. 1.
Answer: Management is responsible for adopting sound accounting policies
and for establishing and maintaining internal control that will, among other
things, initiate, authorize, record, process, and report transactions (as well as
events and conditions) consistent with management's assertions embodied in
the financial statements.
◍ Bid pooling.
Answer: several bidders conspire to split up contracts and ensure that each
gets a certain amount of work.
◍ Tort.
Answer: a private or civil wrong or injury, other than breach of contract, for
which the law will provide a remedy in the form of an action for damages
◍ Racketeering.
Answer: the act of engaging in criminal activity as a structured group,
◍ Terrorism.
Answer: designed to intimidate a population or to compel a government to
do or abstain from doing any act.
◍ Fraudulent Write-Offs or Discounts.
Answer: Where a customer's account is fraudulently written off or entries
are posted to discounts and allowances accounnts wrongly.
◍ pyramid scheme.
, Answer: The organization generates cash flow, not by selling goods and
services to clientele but by the collection of membership fees from new
members.
◍ fictitious refund scheme.
Answer: a fraudster processes a transaction as if a customer were returning
merchandise, even though there is no actual return.
◍ Skimming.
Answer: theft of cash from a victim entity prior to entry in an accounting
system.
◍ Ponzi scheme.
Answer: a fraudulent investment operation where the operator generates
returns for older investors on "paper."
◍ Investigative Services.
Answer: makes use of the forensic accounting professional's skills and may
or may not lead to courtroom testimony
◍ Evidence.
Answer: anything legally presented at trial to prove a contention and
convince a jury
◍ Transparent Disclosure.
Answer: any material information required to understand the numbers
presented in the financial statements, and any deviation from generally
accepted accounting principles, must be explained to the reader of the
financial information
◍ Inventory turnover.
Answer: Cost of goods sold/Average inventory
◍ Remediation.
Answer: 1. Recovery of losses through insurance or the legal process2.
Support for the legal process as it tries to resolve the matter3. Modification
of operational processes and internal controls.
, ◍ Beating the accounting system.
Answer: In this approach, the fraudster feeds false and fictitious information
into the accounting system to manipulate reported results by an amount
greater than can be achieved by simply "playing the accounting system."
◍ Understated Sales.
Answer: that the transaction is posted to the books, but for a lower amount
than the perpetrator collected from the customer
◍ Search Warrant.
Answer: Search warrants are issued by a judge based on probable cause and
put the investigator in charge of the evidentiary search.
◍ Placement.
Answer: The initial stage of money laundering involves placing it into the
financial system.
◍ The Securities Exchange Act of 1934.
Answer: focuses on the regulation of investment securities after their initial
offering to the public.
◍ underbilling scheme.
Answer: the perpetrator sells goods or services below fair market value to a
vendor in which she has a hidden interest.
◍ Professional Skepticism.
Answer: 1. Recognition that fraud may be present.2. An attitude that
includes a questioning mind and critical assessment of evidence.3. A
commitment to persuasive evidence.
◍ Bid-rigging.
Answer: occur when an employee fraudulently assists a vendor in winning a
contract through the competitive bidding process.
◍ Legal Elements of Fraud.
Answer: 1. A material false statement.2. Knowledge that the statement was
false when it was spoken.3. Reliance on the false statement by the victim.4.
FORENSIC ACCOUNTING COMPREHENSIVE
STUDY GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Statement on Auditing Standards (SAS) No. 1.
Answer: Management is responsible for adopting sound accounting policies
and for establishing and maintaining internal control that will, among other
things, initiate, authorize, record, process, and report transactions (as well as
events and conditions) consistent with management's assertions embodied in
the financial statements.
◍ Bid pooling.
Answer: several bidders conspire to split up contracts and ensure that each
gets a certain amount of work.
◍ Tort.
Answer: a private or civil wrong or injury, other than breach of contract, for
which the law will provide a remedy in the form of an action for damages
◍ Racketeering.
Answer: the act of engaging in criminal activity as a structured group,
◍ Terrorism.
Answer: designed to intimidate a population or to compel a government to
do or abstain from doing any act.
◍ Fraudulent Write-Offs or Discounts.
Answer: Where a customer's account is fraudulently written off or entries
are posted to discounts and allowances accounnts wrongly.
◍ pyramid scheme.
, Answer: The organization generates cash flow, not by selling goods and
services to clientele but by the collection of membership fees from new
members.
◍ fictitious refund scheme.
Answer: a fraudster processes a transaction as if a customer were returning
merchandise, even though there is no actual return.
◍ Skimming.
Answer: theft of cash from a victim entity prior to entry in an accounting
system.
◍ Ponzi scheme.
Answer: a fraudulent investment operation where the operator generates
returns for older investors on "paper."
◍ Investigative Services.
Answer: makes use of the forensic accounting professional's skills and may
or may not lead to courtroom testimony
◍ Evidence.
Answer: anything legally presented at trial to prove a contention and
convince a jury
◍ Transparent Disclosure.
Answer: any material information required to understand the numbers
presented in the financial statements, and any deviation from generally
accepted accounting principles, must be explained to the reader of the
financial information
◍ Inventory turnover.
Answer: Cost of goods sold/Average inventory
◍ Remediation.
Answer: 1. Recovery of losses through insurance or the legal process2.
Support for the legal process as it tries to resolve the matter3. Modification
of operational processes and internal controls.
, ◍ Beating the accounting system.
Answer: In this approach, the fraudster feeds false and fictitious information
into the accounting system to manipulate reported results by an amount
greater than can be achieved by simply "playing the accounting system."
◍ Understated Sales.
Answer: that the transaction is posted to the books, but for a lower amount
than the perpetrator collected from the customer
◍ Search Warrant.
Answer: Search warrants are issued by a judge based on probable cause and
put the investigator in charge of the evidentiary search.
◍ Placement.
Answer: The initial stage of money laundering involves placing it into the
financial system.
◍ The Securities Exchange Act of 1934.
Answer: focuses on the regulation of investment securities after their initial
offering to the public.
◍ underbilling scheme.
Answer: the perpetrator sells goods or services below fair market value to a
vendor in which she has a hidden interest.
◍ Professional Skepticism.
Answer: 1. Recognition that fraud may be present.2. An attitude that
includes a questioning mind and critical assessment of evidence.3. A
commitment to persuasive evidence.
◍ Bid-rigging.
Answer: occur when an employee fraudulently assists a vendor in winning a
contract through the competitive bidding process.
◍ Legal Elements of Fraud.
Answer: 1. A material false statement.2. Knowledge that the statement was
false when it was spoken.3. Reliance on the false statement by the victim.4.
