Test Bank in Conjunction with Fraud Examination,Albrecht,5e

1. One way that criminal law differs from civil law is that it:
a. provides remedies for violations of private rights.

b. must yield a unanimous verdict.

c. can have a jury of fewer than 12 persons.

d. allows for various claims in one action.

ANSWER: b

FEEDBACK: a. Incorrect. This is a characteristic of civil law; criminal law
deals with crimes against the public.

b. Correct. Criminal trials must result in an unanimous
verdict.

c. Incorrect. This is a characteristic of civil law; criminal trial
juries must have 12 persons.

d. Incorrect. This is a characteristic of civil law; criminal law
permits only one claim at a time.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-5 -

LO: 1-5
NATIONAL STANDARDS: United States - BUSPROG - Technology

STATE STANDARDS: United States - Illinois - AICPA - BB-Legal

KEYWORDS: Bloom's: Remembering



2. Which of the following is NOT an element of a Ponzi scheme?
a. Gaining other's confidence.

b. Promising abnormally high returns.

c. Collected money is invested.

d. Investment principle is partially used to make payments to previous investors.

,ANSWER: c

FEEDBACK: a. Incorrect. This is one of the most important elements of the
'con'.
b. Incorrect. This is how fraudsters lure in investors.

c. Correct. This is very unlikely.

d. Incorrect. The original principle is often used to make
interest payments.
POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology

STATE STANDARDS: United States - Illinois - AICPA:BB - Resource Management

KEYWORDS: Bloom's Remembering



3. The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:
a. not reporting bribe income may be grounds for being charged with tax evasion.

b. filing income tax that excludes income from fraud may be considered an improper tax
filing.
c. bribes paid may be deducted as business expenses.

d. failure to report income from fraud may be grounds for being charged with tax
evasion.
ANSWER: c

FEEDBACK: a. Incorrect. Not reporting bribe income may be grounds for
being charged with tax evasion.
b. Incorrect. Filing income tax that excludes income from
fraud may be considered an improper tax filing.
c. Correct. Bribes cannot be deducted as legitimate business
expenses.
d. Incorrect.

POINTS: 1

,DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology

STATE STANDARDS: United States - Illinois - AICPA; - BB-Legal

KEYWORDS: Bloom's: Understanding



4. Which one of the following is NOT a characteristic of a criminal proceeding?
a. Deals with offenses against society.

b. Consequences include restitution and damage payments.

c. Jury of 12 individuals.

d. Only one claim may be heard at a time.

ANSWER: b

FEEDBACK: a. Incorrect. A crime is considered as an offense against
society as a whole.

b. Correct. In a criminal proceeding, the consequences are jail
and/or fines.

c. Incorrect. A criminal jury consists of 12 jurors.

d. Incorrect. Only one claim is heard at a time, whereas in a
civil case many claims may be joined into one action.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: LO: 1-5 -

LO: 1-5
NATIONAL STANDARDS: United States - BUSPROG - Technology

STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal

KEYWORDS: Bloom's: Understanding

, 5. Management fraud is often referred to as:
a. stockholder fraud.

b. financial statement fraud.

c. employee fraud.

d. investment fraud.

ANSWER: b

FEEDBACK: a. Incorrect.

b. Correct.

c. Incorrect.

d. Incorrect.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology

STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal

KEYWORDS: | Bloom's: Remembering



6. What is required to prove fraud, as opposed to negligence?
a. Gross error

b. Intent

c. Preponderance of the evidence

d. Confession from the perpetrator

ANSWER: b