FRAUD EXAMINATION 6TH EDITION ALBRECHT
FINAL PAPER SOLVED QUESTIONS WITH
COMPLETE ANSWERS
◉ Long-Term Violators.
Answer: -Take small amounts of funds from employer or employer's
client over time
-More difficult to return funds than to steal them- but wanted to
"clean the slate"
-Perpetrators often feared losing social position not possibility of
punishment
◉ Absconders.
Answer: -People who take the money and run
-Tend to have lower occupational and socio-economic status that
previous 2 categories
◉ Richard C. Hollinger and John P. Clark.
Answer: *Hypotheses of Employee Theft
-Found that employees steal primarily as a result of workplace
conditions
-True costs of employee theft are vastly understated
,*Employee Deviance
-conduct detrimental to the organization and to the employee, is
primarily caused by job dissatisfaction
*Income and Theft
-Absolute income is not a predictor of employee theft
-Statistical relationship between employee's concern over their
financial situation and the level of theft
◉ Albrecht & Colleagues.
Answer: -Believed fraud perpetrators are hard to profile and fraud is
difficult to predict.
-Conducted study to determine which red flags were most important
to the commission (and detection) of fraud.
-Found that 3 factors (elements) involved in frauds
*Situational pressure
*Opportunity to commit and conceal the dishonest act
*Some way to rationalize the act
-Created the Fraud Scale
*Situational pressures
*Perceived opportunities
*Personal integrity
◉ How Occupational Fraud is Committed.
,Answer: The Fraud Tree
-Classification of schemes
◉ Is Fraud universally accepted as wrong?.
Answer: NO.
◉ What do you have to prove in fraud examination?.
Answer: Unlike other crimes - where you have to prove who did it,
how and why -
Fraud examination must also prove -
*There was a fraud
*How much was lost (always subject to debate)
◉ Are audits designed to uncover fraud.
Answer: NO, only to attest to the F/S.
◉ A good investigator will have skills from multiple disciplines -.
Answer: Financial acumen
Law
Criminology
Investigation
, ◉ What is the authoritative sanctioning body for fraud
examination?.
Answer: No single authoritative sanctioning body!
ACFE, AICPA, etc...
◉ Info on fraudsters.
Answer: Many fraudsters are first time offenders.
Most frauds and fraudsters do not have an exit strategy.
Most fraudsters will leave themselves a back door that they believe
will get them out of the fraud.
Be prepared for the client (company that sustained loss) to do
nothing in response to your findings.
Based on findings by the ACFE - a fraud will be perpetrated for 18
months (on average) before being detected.
Can be much longer --- 2 years or more.
◉ In a court of law - only two things are relevant:.
Answer: In a court of law - only two things are relevant:
-Admissibility
-Believability
*Truth has no relevance
◉ Is it okay if you conclude there was no fraud?.
FINAL PAPER SOLVED QUESTIONS WITH
COMPLETE ANSWERS
◉ Long-Term Violators.
Answer: -Take small amounts of funds from employer or employer's
client over time
-More difficult to return funds than to steal them- but wanted to
"clean the slate"
-Perpetrators often feared losing social position not possibility of
punishment
◉ Absconders.
Answer: -People who take the money and run
-Tend to have lower occupational and socio-economic status that
previous 2 categories
◉ Richard C. Hollinger and John P. Clark.
Answer: *Hypotheses of Employee Theft
-Found that employees steal primarily as a result of workplace
conditions
-True costs of employee theft are vastly understated
,*Employee Deviance
-conduct detrimental to the organization and to the employee, is
primarily caused by job dissatisfaction
*Income and Theft
-Absolute income is not a predictor of employee theft
-Statistical relationship between employee's concern over their
financial situation and the level of theft
◉ Albrecht & Colleagues.
Answer: -Believed fraud perpetrators are hard to profile and fraud is
difficult to predict.
-Conducted study to determine which red flags were most important
to the commission (and detection) of fraud.
-Found that 3 factors (elements) involved in frauds
*Situational pressure
*Opportunity to commit and conceal the dishonest act
*Some way to rationalize the act
-Created the Fraud Scale
*Situational pressures
*Perceived opportunities
*Personal integrity
◉ How Occupational Fraud is Committed.
,Answer: The Fraud Tree
-Classification of schemes
◉ Is Fraud universally accepted as wrong?.
Answer: NO.
◉ What do you have to prove in fraud examination?.
Answer: Unlike other crimes - where you have to prove who did it,
how and why -
Fraud examination must also prove -
*There was a fraud
*How much was lost (always subject to debate)
◉ Are audits designed to uncover fraud.
Answer: NO, only to attest to the F/S.
◉ A good investigator will have skills from multiple disciplines -.
Answer: Financial acumen
Law
Criminology
Investigation
, ◉ What is the authoritative sanctioning body for fraud
examination?.
Answer: No single authoritative sanctioning body!
ACFE, AICPA, etc...
◉ Info on fraudsters.
Answer: Many fraudsters are first time offenders.
Most frauds and fraudsters do not have an exit strategy.
Most fraudsters will leave themselves a back door that they believe
will get them out of the fraud.
Be prepared for the client (company that sustained loss) to do
nothing in response to your findings.
Based on findings by the ACFE - a fraud will be perpetrated for 18
months (on average) before being detected.
Can be much longer --- 2 years or more.
◉ In a court of law - only two things are relevant:.
Answer: In a court of law - only two things are relevant:
-Admissibility
-Believability
*Truth has no relevance
◉ Is it okay if you conclude there was no fraud?.
