Fraud Examination Exam 1 correctly
answered to pass
What is the single most important element for fraud to be successful? - correct answer
✔✔Confidence
Financial statement fraud often occurs in companies that are experiencing net losses or have
profits much less than expected: - correct answer ✔✔True
Employee Embezzlement - correct answer ✔✔Employees deceive their employers by taking
company assets
-Most common type of fraud
Vendor Fraud - correct answer ✔✔Results in either an overcharge for purchased goods, the
shipment of inferior goods, or the nonshipment of goods even though payment is made
Customer Fraud - correct answer ✔✔Customers don't pay, pay too little, or get too much from
the organization through deception
Management Fraud - correct answer ✔✔Management manipulates the financial statements to
make the company look better (or worse in the case of tax fraud) than it is.
-This is the most expensive type of fraud
victim: shareholders or debt-holders
Investment scams and other consumer frauds - correct answer ✔✔Are committed on the
internet or in person and obtain the confidence of individuals to get them to invest money in a
worthless scheme
, Other (miscellaneous) types of fraud - correct answer ✔✔Anytime anyone takes advantage of
the confidence of another person to deceive him or her
Most common consumer fraud schemes: - correct answer ✔✔- Ponzi scheme (lure investment
funds from victims and then pay those victims a premium or interest from money that is paid by
subsequent investors)
-Telemarketing fraud
-Nigerian letter or money scams
-Identity theft
-Advance fee scams
-Redemption/strawman/bond fraud
-Letter of credit fraud
-Internet fraud
Legal definition of fraud with 7 elements: - correct answer ✔✔1. A representation
2. About a material point
3. which is false
4. and intentionally or recklessly so
5.which is believed
6. and acted upon by the victim
7. to the victims damage
What was the intended lesson of the Obvious Fraud interview scenario? (Where Hannah and
Hanna approached him) - correct answer ✔✔The intention was to show us that sometimes its
not best to immediately approach a fraudster. Waiting and gathering more evidence and start
an investigation is best.
answered to pass
What is the single most important element for fraud to be successful? - correct answer
✔✔Confidence
Financial statement fraud often occurs in companies that are experiencing net losses or have
profits much less than expected: - correct answer ✔✔True
Employee Embezzlement - correct answer ✔✔Employees deceive their employers by taking
company assets
-Most common type of fraud
Vendor Fraud - correct answer ✔✔Results in either an overcharge for purchased goods, the
shipment of inferior goods, or the nonshipment of goods even though payment is made
Customer Fraud - correct answer ✔✔Customers don't pay, pay too little, or get too much from
the organization through deception
Management Fraud - correct answer ✔✔Management manipulates the financial statements to
make the company look better (or worse in the case of tax fraud) than it is.
-This is the most expensive type of fraud
victim: shareholders or debt-holders
Investment scams and other consumer frauds - correct answer ✔✔Are committed on the
internet or in person and obtain the confidence of individuals to get them to invest money in a
worthless scheme
, Other (miscellaneous) types of fraud - correct answer ✔✔Anytime anyone takes advantage of
the confidence of another person to deceive him or her
Most common consumer fraud schemes: - correct answer ✔✔- Ponzi scheme (lure investment
funds from victims and then pay those victims a premium or interest from money that is paid by
subsequent investors)
-Telemarketing fraud
-Nigerian letter or money scams
-Identity theft
-Advance fee scams
-Redemption/strawman/bond fraud
-Letter of credit fraud
-Internet fraud
Legal definition of fraud with 7 elements: - correct answer ✔✔1. A representation
2. About a material point
3. which is false
4. and intentionally or recklessly so
5.which is believed
6. and acted upon by the victim
7. to the victims damage
What was the intended lesson of the Obvious Fraud interview scenario? (Where Hannah and
Hanna approached him) - correct answer ✔✔The intention was to show us that sometimes its
not best to immediately approach a fraudster. Waiting and gathering more evidence and start
an investigation is best.
