FRAUD EXAMINATION 6TH EDITION ALBRECHT
ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Occupational Fraud and Abuse.
Answer: The use of one's occupation for personal enrichment
through the deliberate misuse or misapplication of the employing
organization's resources or assets.
◉ What is Fraud?.
Answer: Fraud, sometimes referred to as the fraudulent act, is an
intentional deception, whether by omission or co-mission, that
causes its victim to suffer an economic loss and/or the perpetrator
to realize a gain.
In the broadest sense, fraud can encompass any crime for gain that
uses deception as its principle technique.
◉ Fraud Schemes.
Answer: Specific methodologies used to commit the fraud, and
conceal the fraudulent act.
◉ Three ways to illegally relieve a victim of money:.
Answer: Force, trickery or larceny.
,(Those offenses that employ trickery are frauds)
◉ Average cost of Fraud?.
Answer: According to the ACFE's studies - cost about 5-7% of
revenues.
True cost will never be known.
◉ Four Characteristics of Most Frauds.
Answer: 1. Activity is clandestine
2. Violates the employee's fiduciary duties to organization
3. Committed for the purpose of direct or indirect financial benefit to
the employee
4. Costs the employing organization assets, revenues, or reserves
◉ Elements of Fraud.
Answer: Four Elements -
-A material false statement
-Knowledge that the statement was false when it was uttered
-Reliance on the false statement by the victim
-Damages resulting from the victim's reliance on the false statement
◉ Edward Sutherland.
,Answer: Occupational Fraud and Abuse Researcher.
-Coined term "white collar"
-Differential association
(Crime is a learned behavior)
◉ Donald Cressey.
Answer: Occupational Fraud and Abuse Researcher.
-Cressey's Hypothesis
-Fraud Triangle
◉ Cressey's Hypothesis.
Answer: Trusted persons become trust violators when they conceive
of themselves as having a financial problem which is non-sharable,
are aware this problem can be secretly resolved by violation of the
position of financial trust, and are able to apply to their own conduct
in that situation verbalizations which enable them to adjust their
conceptions of themselves as trusted person with their conceptions
of themselves as users of the entrusted funds or property.
◉ Fraud Triangle.
Answer: -Opportunity
-Pressure
-Rationalization
, ◉ Non-Shareable Financial Problems- Pressure.
Answer: Cressey Noted -
Needs money or something they can convert to money to solve
problem
Problem itself needs to be kept secret
In their eyes
Different for different people
Therefore, the act of solving the problem also needs to be kept
secret.
◉ Violations of Ascribed Obligations.
Answer: Cannot keep up with one's status - debts
◉ Problems from Personal Failure.
Answer: Bad decisions
◉ Business Reversals.
Answer: Business failure
ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Occupational Fraud and Abuse.
Answer: The use of one's occupation for personal enrichment
through the deliberate misuse or misapplication of the employing
organization's resources or assets.
◉ What is Fraud?.
Answer: Fraud, sometimes referred to as the fraudulent act, is an
intentional deception, whether by omission or co-mission, that
causes its victim to suffer an economic loss and/or the perpetrator
to realize a gain.
In the broadest sense, fraud can encompass any crime for gain that
uses deception as its principle technique.
◉ Fraud Schemes.
Answer: Specific methodologies used to commit the fraud, and
conceal the fraudulent act.
◉ Three ways to illegally relieve a victim of money:.
Answer: Force, trickery or larceny.
,(Those offenses that employ trickery are frauds)
◉ Average cost of Fraud?.
Answer: According to the ACFE's studies - cost about 5-7% of
revenues.
True cost will never be known.
◉ Four Characteristics of Most Frauds.
Answer: 1. Activity is clandestine
2. Violates the employee's fiduciary duties to organization
3. Committed for the purpose of direct or indirect financial benefit to
the employee
4. Costs the employing organization assets, revenues, or reserves
◉ Elements of Fraud.
Answer: Four Elements -
-A material false statement
-Knowledge that the statement was false when it was uttered
-Reliance on the false statement by the victim
-Damages resulting from the victim's reliance on the false statement
◉ Edward Sutherland.
,Answer: Occupational Fraud and Abuse Researcher.
-Coined term "white collar"
-Differential association
(Crime is a learned behavior)
◉ Donald Cressey.
Answer: Occupational Fraud and Abuse Researcher.
-Cressey's Hypothesis
-Fraud Triangle
◉ Cressey's Hypothesis.
Answer: Trusted persons become trust violators when they conceive
of themselves as having a financial problem which is non-sharable,
are aware this problem can be secretly resolved by violation of the
position of financial trust, and are able to apply to their own conduct
in that situation verbalizations which enable them to adjust their
conceptions of themselves as trusted person with their conceptions
of themselves as users of the entrusted funds or property.
◉ Fraud Triangle.
Answer: -Opportunity
-Pressure
-Rationalization
, ◉ Non-Shareable Financial Problems- Pressure.
Answer: Cressey Noted -
Needs money or something they can convert to money to solve
problem
Problem itself needs to be kept secret
In their eyes
Different for different people
Therefore, the act of solving the problem also needs to be kept
secret.
◉ Violations of Ascribed Obligations.
Answer: Cannot keep up with one's status - debts
◉ Problems from Personal Failure.
Answer: Bad decisions
◉ Business Reversals.
Answer: Business failure
