COLORADO OCCUPATIONAL FRAUD EXAMINATION
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) Q&A 2026|INSTANT
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1. What best defines occupational fraud?
A. Fraud committed by external hackers
B. Fraud committed against employees by employers
C. Fraud committed by an employee against an organization
D. Fraud committed only in government agencies
Rationale: Occupational fraud involves internal personnel
abusing their position for personal gain.
Correct Answer: C
2. Which of the following is NOT a category of occupational
fraud under the Fraud Triangle?
A. Pressure
B. Opportunity
C. Rationalization
D. Investigation
Rationale: The Fraud Triangle includes pressure, opportunity,
and rationalization.
Correct Answer: D
,3. Which type of fraud involves falsifying financial
statements?
A. Asset misappropriation
B. Corruption
C. Financial statement fraud
D. Payroll fraud
Rationale: Financial statement fraud involves manipulation of
accounting records.
Correct Answer: C
4. Asset misappropriation most commonly involves:
A. Bribery schemes
B. Theft of company resources
C. Insider trading
D. Tax evasion
Rationale: Asset misappropriation is theft or misuse of
organizational assets.
Correct Answer: B
5. Which is a common red flag of occupational fraud?
A. Employee rotation in duties
B. Lifestyle changes inconsistent with salary
C. Mandatory vacation policies
D. Strong internal controls
,Rationale: Sudden unexplained wealth may indicate fraud.
Correct Answer: B
6. The primary purpose of internal controls is to:
A. Increase employee workload
B. Detect and prevent fraud and errors
C. Replace external audits
D. Eliminate management oversight
Rationale: Internal controls safeguard assets and ensure
accuracy.
Correct Answer: B
7. Which is an example of a preventive control?
A. Bank reconciliation
B. Surprise audits
C. Segregation of duties
D. Fraud investigation
Rationale: Preventive controls stop fraud before it occurs.
Correct Answer: C
8. Segregation of duties means:
A. One employee handles all financial tasks
B. Splitting responsibilities among multiple employees
, C. Allowing managers full control over all accounts
D. Outsourcing payroll completely
Rationale: It reduces opportunity for fraud.
Correct Answer: B
9. Which scheme involves employees creating fake vendors?
A. Payroll fraud
B. Billing scheme
C. Skimming
D. Expense reimbursement fraud
Rationale: Billing schemes often involve fictitious vendors.
Correct Answer: B
10. Skimming refers to:
A. Theft of cash before it is recorded
B. Altering payroll records
C. Manipulating stock prices
D. Forging financial statements
Rationale: Skimming is off-the-books cash theft.
Correct Answer: A
11. Corruption in occupational fraud includes:
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) Q&A 2026|INSTANT
DOWNLAOD PDF
1. What best defines occupational fraud?
A. Fraud committed by external hackers
B. Fraud committed against employees by employers
C. Fraud committed by an employee against an organization
D. Fraud committed only in government agencies
Rationale: Occupational fraud involves internal personnel
abusing their position for personal gain.
Correct Answer: C
2. Which of the following is NOT a category of occupational
fraud under the Fraud Triangle?
A. Pressure
B. Opportunity
C. Rationalization
D. Investigation
Rationale: The Fraud Triangle includes pressure, opportunity,
and rationalization.
Correct Answer: D
,3. Which type of fraud involves falsifying financial
statements?
A. Asset misappropriation
B. Corruption
C. Financial statement fraud
D. Payroll fraud
Rationale: Financial statement fraud involves manipulation of
accounting records.
Correct Answer: C
4. Asset misappropriation most commonly involves:
A. Bribery schemes
B. Theft of company resources
C. Insider trading
D. Tax evasion
Rationale: Asset misappropriation is theft or misuse of
organizational assets.
Correct Answer: B
5. Which is a common red flag of occupational fraud?
A. Employee rotation in duties
B. Lifestyle changes inconsistent with salary
C. Mandatory vacation policies
D. Strong internal controls
,Rationale: Sudden unexplained wealth may indicate fraud.
Correct Answer: B
6. The primary purpose of internal controls is to:
A. Increase employee workload
B. Detect and prevent fraud and errors
C. Replace external audits
D. Eliminate management oversight
Rationale: Internal controls safeguard assets and ensure
accuracy.
Correct Answer: B
7. Which is an example of a preventive control?
A. Bank reconciliation
B. Surprise audits
C. Segregation of duties
D. Fraud investigation
Rationale: Preventive controls stop fraud before it occurs.
Correct Answer: C
8. Segregation of duties means:
A. One employee handles all financial tasks
B. Splitting responsibilities among multiple employees
, C. Allowing managers full control over all accounts
D. Outsourcing payroll completely
Rationale: It reduces opportunity for fraud.
Correct Answer: B
9. Which scheme involves employees creating fake vendors?
A. Payroll fraud
B. Billing scheme
C. Skimming
D. Expense reimbursement fraud
Rationale: Billing schemes often involve fictitious vendors.
Correct Answer: B
10. Skimming refers to:
A. Theft of cash before it is recorded
B. Altering payroll records
C. Manipulating stock prices
D. Forging financial statements
Rationale: Skimming is off-the-books cash theft.
Correct Answer: A
11. Corruption in occupational fraud includes:
