ACTG 4510 TEST PAPER 2025/2026 QUESTIONS WITH
ANSWERS GRADED A+
✔✔Intentional or reckless conduct that results in materially misleading financial
statements is called
A) financial fraud.
B) misstatement fraud.
C) fraudulent financial reporting.
D) audit failure fraud - ✔✔C. Fraudulent financial reporting
✔✔Which of the following is not an example of one of the basic types of fraud?
A) While straightening the store at the end of the day, a shoe store employee finds and
keeps an expensive pair of sunglasses left by a customer.
B) An executive devised and implemented a plan to accelerate revenue recognition on a
long-term contract, which will allow the company to forestall filing for bankruptcy. The
executive does not own any stock, stock options or grants, and will not receive a bonus
or perk because of the overstated revenue.
C) A purchasing agent places a large order at higher-than-normal unit prices with a
vendor that gave the agent tickets to several football games.
D) A salesperson approves a large sales discount on an order from a company owned
partially by the salesperson's sister. - ✔✔A. While straightening the store at the end of
the day, a shoe store employee finds and keeps an expensive pair of sunglasses left by
a customer.
✔✔Misappropriation of assets is a fraudulent act that involves
A) dishonest conduct by those in power.
B) misrepresenting facts to promote an investment.
C) using computer technology to perpetrate.
D) theft of company property - ✔✔D. Theft of company property
✔✔Lapping is best described as the process of
A) applying cash receipts to a different customer's account in an attempt to conceal
previous thefts of cash receipts.
B) inflating bank balances by transferring money among different bank accounts.
C) stealing small amounts of cash, many times over a period of time.
D) increasing expenses to conceal that an asset was stolen - ✔✔A. applying cash
receipts to a different customer's account in an attempt to conceal previous thefts of
cash receipts.
✔✔Which of the following is not an example of the fraud triangle characteristic
concerned with rationalization?
A) revenge against the company
B) intent to repay "borrowed" funds in the future
C) sense of entitlement as compensation for receiving a lower than average raise
,D) belief that the company won't suffer because an insurance company will reimburse
losses - ✔✔A. Revenge against the company
✔✔Which of the following is the best way to hide theft of assets?
A) creating "cash" through the transfer of money between banks
B) conversion of stolen assets into cash
C) stealing cash from customer A and then using customer B's balance to pay customer
A's accounts receivable
D) charging the stolen asset to an expense account - ✔✔D. charging the stolen asset to
an expense account
✔✔Which of the following is not a way to reduce fraud losses?
A) Conduct periodic external and internal audits.
B) Maintain adequate insurance.
C) Use software to monitor system activity.
D) Store backup copies of program and data files - ✔✔A. Conduct periodic external and
internal audits
✔✔Which of the following will not reduce the likelihood of an occurrence of fraud?
A) encryption of data and programs
B) use of forensic accountants
C) adequate insurance coverage
D) required vacations and rotation of duties - ✔✔C. Adequate insurance coverage
✔✔What is a denial of service attack?
A) A denial of service attack occurs when the perpetrator sends hundreds of messages
from randomly generated false addresses, overloading an Internet service provider's e-
mail server.
B) A denial of service attack occurs when an e-mail message is sent through a re-
mailer, who removes the message headers making the message anonymous, then
resends the message to selected addresses.
C) A denial of service attack occurs when a cracker enters a system through an idle
modem, captures the PC attached to the modem, and then gains access to the network
to which it is connected.
D) A denial of service attack occurs when the perpetrator e-mails the same message to
everyone on one or more Usenet newsgroups LISTSERV lists - ✔✔A. occurs when the
perpetrator sends hundreds of messages from randomly generated false addresses,
overloading an Internet service provider's e-mail server.
✔✔________ consists of the unauthorized copying of company data.
A) Phishing
B) Masquerading
C) Data leakage
D) Eavesdropping - ✔✔C. Data leakage
, ✔✔Gaining control of somebody's computer without their knowledge and using it to
carryout illicit activities is known as
A) hacking.
B) sniffing.
C) phreaking.
D) hijacking - ✔✔D. Hijacking
✔✔Tapping into a communications line and then entering the system by accompanying
alegitimate user without their knowledge is called
A) super zapping.
B) data leakage.
C) hacking.
D) piggybacking - ✔✔D. Piggybacking
✔✔Which of the following is not a method of identity theft?
A) scavenging
B) phishing
C) shoulder surfing
D) phreaking - ✔✔D. phreaking
✔✔LOLer was chatting online with l33ter. "I can't believe how lame some people are! :)
I can get into any system by checking out the company website to see how user names
are defined and who is on the employee directory. Then, all it takes is brute force to find
the password." LOLer is a ________, and the fraud he is describing is ________.
A) hacker; social engineering
B) phreaker; dumpster diving
C) hacker; password cracking
D) phreaker; the salami technique - ✔✔C. Hacker; password cracking
✔✔Computers that are part of a botnet and are controlled by a bot herder are referred
to as
A) posers.
B) zombies.
C) botsquats.
D) evil twins - ✔✔B. Zombies
✔✔On the weekends, Thuy Nguyen climbs into her Toyota Camry and drives around
the city of Las Vegas looking for unprotected wireless networks to exploit. Thuy is most
likely engaging in
A) snarfing.
B) Wi-pilfering.
C) war driving.
D) data slurping. - ✔✔C. War driving
ANSWERS GRADED A+
✔✔Intentional or reckless conduct that results in materially misleading financial
statements is called
A) financial fraud.
B) misstatement fraud.
C) fraudulent financial reporting.
D) audit failure fraud - ✔✔C. Fraudulent financial reporting
✔✔Which of the following is not an example of one of the basic types of fraud?
A) While straightening the store at the end of the day, a shoe store employee finds and
keeps an expensive pair of sunglasses left by a customer.
B) An executive devised and implemented a plan to accelerate revenue recognition on a
long-term contract, which will allow the company to forestall filing for bankruptcy. The
executive does not own any stock, stock options or grants, and will not receive a bonus
or perk because of the overstated revenue.
C) A purchasing agent places a large order at higher-than-normal unit prices with a
vendor that gave the agent tickets to several football games.
D) A salesperson approves a large sales discount on an order from a company owned
partially by the salesperson's sister. - ✔✔A. While straightening the store at the end of
the day, a shoe store employee finds and keeps an expensive pair of sunglasses left by
a customer.
✔✔Misappropriation of assets is a fraudulent act that involves
A) dishonest conduct by those in power.
B) misrepresenting facts to promote an investment.
C) using computer technology to perpetrate.
D) theft of company property - ✔✔D. Theft of company property
✔✔Lapping is best described as the process of
A) applying cash receipts to a different customer's account in an attempt to conceal
previous thefts of cash receipts.
B) inflating bank balances by transferring money among different bank accounts.
C) stealing small amounts of cash, many times over a period of time.
D) increasing expenses to conceal that an asset was stolen - ✔✔A. applying cash
receipts to a different customer's account in an attempt to conceal previous thefts of
cash receipts.
✔✔Which of the following is not an example of the fraud triangle characteristic
concerned with rationalization?
A) revenge against the company
B) intent to repay "borrowed" funds in the future
C) sense of entitlement as compensation for receiving a lower than average raise
,D) belief that the company won't suffer because an insurance company will reimburse
losses - ✔✔A. Revenge against the company
✔✔Which of the following is the best way to hide theft of assets?
A) creating "cash" through the transfer of money between banks
B) conversion of stolen assets into cash
C) stealing cash from customer A and then using customer B's balance to pay customer
A's accounts receivable
D) charging the stolen asset to an expense account - ✔✔D. charging the stolen asset to
an expense account
✔✔Which of the following is not a way to reduce fraud losses?
A) Conduct periodic external and internal audits.
B) Maintain adequate insurance.
C) Use software to monitor system activity.
D) Store backup copies of program and data files - ✔✔A. Conduct periodic external and
internal audits
✔✔Which of the following will not reduce the likelihood of an occurrence of fraud?
A) encryption of data and programs
B) use of forensic accountants
C) adequate insurance coverage
D) required vacations and rotation of duties - ✔✔C. Adequate insurance coverage
✔✔What is a denial of service attack?
A) A denial of service attack occurs when the perpetrator sends hundreds of messages
from randomly generated false addresses, overloading an Internet service provider's e-
mail server.
B) A denial of service attack occurs when an e-mail message is sent through a re-
mailer, who removes the message headers making the message anonymous, then
resends the message to selected addresses.
C) A denial of service attack occurs when a cracker enters a system through an idle
modem, captures the PC attached to the modem, and then gains access to the network
to which it is connected.
D) A denial of service attack occurs when the perpetrator e-mails the same message to
everyone on one or more Usenet newsgroups LISTSERV lists - ✔✔A. occurs when the
perpetrator sends hundreds of messages from randomly generated false addresses,
overloading an Internet service provider's e-mail server.
✔✔________ consists of the unauthorized copying of company data.
A) Phishing
B) Masquerading
C) Data leakage
D) Eavesdropping - ✔✔C. Data leakage
, ✔✔Gaining control of somebody's computer without their knowledge and using it to
carryout illicit activities is known as
A) hacking.
B) sniffing.
C) phreaking.
D) hijacking - ✔✔D. Hijacking
✔✔Tapping into a communications line and then entering the system by accompanying
alegitimate user without their knowledge is called
A) super zapping.
B) data leakage.
C) hacking.
D) piggybacking - ✔✔D. Piggybacking
✔✔Which of the following is not a method of identity theft?
A) scavenging
B) phishing
C) shoulder surfing
D) phreaking - ✔✔D. phreaking
✔✔LOLer was chatting online with l33ter. "I can't believe how lame some people are! :)
I can get into any system by checking out the company website to see how user names
are defined and who is on the employee directory. Then, all it takes is brute force to find
the password." LOLer is a ________, and the fraud he is describing is ________.
A) hacker; social engineering
B) phreaker; dumpster diving
C) hacker; password cracking
D) phreaker; the salami technique - ✔✔C. Hacker; password cracking
✔✔Computers that are part of a botnet and are controlled by a bot herder are referred
to as
A) posers.
B) zombies.
C) botsquats.
D) evil twins - ✔✔B. Zombies
✔✔On the weekends, Thuy Nguyen climbs into her Toyota Camry and drives around
the city of Las Vegas looking for unprotected wireless networks to exploit. Thuy is most
likely engaging in
A) snarfing.
B) Wi-pilfering.
C) war driving.
D) data slurping. - ✔✔C. War driving
