Fraud Exam 1 Questions with Correct Answers Solved 100%
what is fraud in CRIMINAL LAW - Answers the crime or offense of deliberately deceiving another in order
to damage them -- usually, to obtain property or services unjustly
why do we need to understand the psychology of influence - Answers bc we need to understand what
affects behavior
- very important interpersonal skill for auditors and investigators
what are the 6 shortcuts to persuasion - Answers 1. Reciprocity
2. Scarcity
3. Authority
4. Consistency
5. Liking
6. Consensus
what is reciprocity - Answers obligation to return a favor
- ppl want to give back to the ppl who gave to them first (they do you a favor so you want to do one in
return)
what is commitment and consistency - Answers - ppl desire consistency in behavior
- ppl are more likely to be consistent w the things they've said or done
- if you get someone to sign a Code of Conduct they're more likely to follow it than verbal agrmt
- it's better if you have smone agree to cooperate w smtg if you ask them beforehand
- ex: a prompt comes up asking "do you consider yourself a champion of human rights?" -- if they
answer yes, when the next question comes up asking them to donate to the cause, they'll be more likely
to donate bc that would be consistent to their previous response
what is liking - Answers - likeable ppl carry more influence than unlikeable
- consistency, honesty, how we treat our clients will affect this positively
, - we like ppl who are similar to us, give us compliments, and are trying to reach similar goals
what is authority - Answers - ppl perceived as an authority influence others
- can come from position, title, expertise, dress, accomplishments, etc
- ppl are more likely to respond to someone who is credible
--- can be done by others going around telling ppl you're trustworthy
--- can be from a title next to your name (ex: CPA)
what is scarcity - Answers - limited source makes us desire smtg more
- ppl want more of the things they have less of
what is social proof (consensus) - Answers looking to others for accepted behavior
- ppl will look to the actions and behaviors of others to influence their own
- other ppl can influence our own choices
why is it important to understand behavior and persuasion concepts - Answers the better you are at
understanding what drives behavior, the better auditor you will be
where does most fraud occur - Answers occupational fraud
what is occupational fraud - Answers 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 the fraud triangle - Answers 1. opportunity
2. pressure
3. rationalization
who developed the fraud triangle - Answers donald cressey
what is the fraud diamond - Answers incentive, opportunity, rationalization, capability
what is pressure in the fraud triangle - Answers motivation or incentive to commit fraud
what is fraud in CRIMINAL LAW - Answers the crime or offense of deliberately deceiving another in order
to damage them -- usually, to obtain property or services unjustly
why do we need to understand the psychology of influence - Answers bc we need to understand what
affects behavior
- very important interpersonal skill for auditors and investigators
what are the 6 shortcuts to persuasion - Answers 1. Reciprocity
2. Scarcity
3. Authority
4. Consistency
5. Liking
6. Consensus
what is reciprocity - Answers obligation to return a favor
- ppl want to give back to the ppl who gave to them first (they do you a favor so you want to do one in
return)
what is commitment and consistency - Answers - ppl desire consistency in behavior
- ppl are more likely to be consistent w the things they've said or done
- if you get someone to sign a Code of Conduct they're more likely to follow it than verbal agrmt
- it's better if you have smone agree to cooperate w smtg if you ask them beforehand
- ex: a prompt comes up asking "do you consider yourself a champion of human rights?" -- if they
answer yes, when the next question comes up asking them to donate to the cause, they'll be more likely
to donate bc that would be consistent to their previous response
what is liking - Answers - likeable ppl carry more influence than unlikeable
- consistency, honesty, how we treat our clients will affect this positively
, - we like ppl who are similar to us, give us compliments, and are trying to reach similar goals
what is authority - Answers - ppl perceived as an authority influence others
- can come from position, title, expertise, dress, accomplishments, etc
- ppl are more likely to respond to someone who is credible
--- can be done by others going around telling ppl you're trustworthy
--- can be from a title next to your name (ex: CPA)
what is scarcity - Answers - limited source makes us desire smtg more
- ppl want more of the things they have less of
what is social proof (consensus) - Answers looking to others for accepted behavior
- ppl will look to the actions and behaviors of others to influence their own
- other ppl can influence our own choices
why is it important to understand behavior and persuasion concepts - Answers the better you are at
understanding what drives behavior, the better auditor you will be
where does most fraud occur - Answers occupational fraud
what is occupational fraud - Answers 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 the fraud triangle - Answers 1. opportunity
2. pressure
3. rationalization
who developed the fraud triangle - Answers donald cressey
what is the fraud diamond - Answers incentive, opportunity, rationalization, capability
what is pressure in the fraud triangle - Answers motivation or incentive to commit fraud
