Test Bank for Fraud Examination 7th
Edition MADE EASY !!
Criminal Law - (ANSWER)Must yield a unanimous verdict.
Civil Law - (ANSWER)Provides remedies for violations of private rights.
Ponzi Scheme - (ANSWER)A scheme that promises abnormally high returns and uses part of the
investment principal to pay previous investors.
Title 26, U.S. Code Section 7201 - (ANSWER)Not reporting bribe income may be grounds for
being charged with tax evasion.
Tax Evasion - (ANSWER)Failure to report income from fraud or bribes may be prosecuted as
tax evasion.
Criminal Proceedings - (ANSWER)Deal with offenses against society.
Criminal Jury - (ANSWER)Consists of 12 jurors.
False Return - (ANSWER)A tax filing that excludes income from fraud may be considered a
false return.
Business Expenses - (ANSWER)Bribes cannot be deducted as legitimate business expenses.
Restitution - (ANSWER)Consequences of criminal proceedings include jail and/or fines.
Multiple Claims in Civil Law - (ANSWER)In civil cases, many claims may be joined into a
single case.
Unanimous Verdict - (ANSWER)A requirement in criminal trials.
Investment Principle in Ponzi Schemes - (ANSWER)Often used to make interest payments.
Confidence in Ponzi Schemes - (ANSWER)Gaining others' confidence is one of the most
important elements of the con.
High Returns in Ponzi Schemes - (ANSWER)Promising abnormally high returns is how
fraudsters lure in investors.
One Claim in Criminal Law - (ANSWER)In criminal law, only one claim may be heard at a
time.
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,Improper Tax Filing - (ANSWER)Filing income tax that excludes income from fraud may be
considered an improper tax filing.
Characteristics of Civil Law - (ANSWER)Includes various claims in one action.
Elements of a Ponzi Scheme - (ANSWER)Gaining others' confidence, promising high returns,
and using investment principal to pay previous investors.
Consequences of Criminal Proceedings - (ANSWER)Include restitution and damage payments.
Elements of Title 26 - (ANSWER)Not reporting bribe income, excluding income from fraud, and
failure to report income from fraud.
Tax Evasion Grounds - (ANSWER)Not reporting bribe income or income from fraud.
Characteristics of Criminal Proceedings - (ANSWER)Involve a jury of 12 individuals and deal
with offenses against society.
Management fraud - (ANSWER)In its most common form, management fraud involves top
management's deceptive manipulation of financial statements.
Fraud proof requirement - (ANSWER)To succeed in a criminal or civil prosecution, it is usually
necessary to show that the perpetrator acted with intent to defraud the victim.
Most common type of occupational fraud - (ANSWER)Employee embezzlement is the most
common type of occupational fraud.
Characteristic of management fraud - (ANSWER)Management fraud often involves top
management's deceptive manipulation.
Negligence - (ANSWER)Negligence does not constitute fraud because it lacks intent to gain
advantage over the victim through false pretenses.
Preponderance of the evidence - (ANSWER)Preponderance of the evidence is what is proven in
any civil case and is not specific to fraud.
Confession from the perpetrator - (ANSWER)Confession is not required to prove fraud. In fact,
many perpetrators never admit their guilt.
Kickbacks or bribes - (ANSWER)These are examples of employee embezzlement.
Intent - (ANSWER)Intent is required to prove fraud, as opposed to error.
Financial statement fraud - (ANSWER)Management fraud is often referred to as financial
statement fraud.
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, Employee fraud - (ANSWER)Management fraud is not typically classified as employee fraud.
Investment fraud - (ANSWER)Management fraud is not typically classified as investment fraud.
Stockholder fraud - (ANSWER)Management fraud is not typically classified as stockholder
fraud.
Source of learning objectives - (ANSWER)6e revised is the source referenced for learning
objectives.
Date created - (ANSWER)The notes were created on 2/9/2024 at 6:36 AM.
Date modified - (ANSWER)The notes were modified on 2/9/2024 at 6:44 AM.
Learning objective FRAU.ALBR.25.1.5 - (ANSWER)Understand the differences between
criminal and civil fraud laws.
Learning objective FRAU.ALBR.25.1.3 - (ANSWER)Understand Different Types of Fraud.
Difficulty level of questions - (ANSWER)The difficulty levels of the questions vary between
easy and moderate.
Multiple choice question type - (ANSWER)The questions are formatted as multiple choice.
Variables in questions - (ANSWER)The questions do not have variables.
Feedback on answers - (ANSWER)Feedback is provided for each answer option in the questions.
Customer fraud - (ANSWER)Includes paying too little for goods received, not paying for goods
purchased, and deceiving the organization into giving the customer something that it should not.
Vendor fraud - (ANSWER)Involves participation of buyers from the company being defrauded,
false financial statement reporting by upper management, physical removal of inventory from the
business premises, and diversion of funds by an employee.
Government fraud statistics - (ANSWER)Published by agencies such as the FBI, FDIC, FTC,
and the IRS, these statistics are only related to their jurisdiction and do not provide a complete
picture of fraud.
Fraud statistics completeness - (ANSWER)Government agencies only publish those statistics
that are directly related to their jurisdictions, resulting in incomplete statistics.
Fraud seriousness - (ANSWER)Understanding the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
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Edition MADE EASY !!
Criminal Law - (ANSWER)Must yield a unanimous verdict.
Civil Law - (ANSWER)Provides remedies for violations of private rights.
Ponzi Scheme - (ANSWER)A scheme that promises abnormally high returns and uses part of the
investment principal to pay previous investors.
Title 26, U.S. Code Section 7201 - (ANSWER)Not reporting bribe income may be grounds for
being charged with tax evasion.
Tax Evasion - (ANSWER)Failure to report income from fraud or bribes may be prosecuted as
tax evasion.
Criminal Proceedings - (ANSWER)Deal with offenses against society.
Criminal Jury - (ANSWER)Consists of 12 jurors.
False Return - (ANSWER)A tax filing that excludes income from fraud may be considered a
false return.
Business Expenses - (ANSWER)Bribes cannot be deducted as legitimate business expenses.
Restitution - (ANSWER)Consequences of criminal proceedings include jail and/or fines.
Multiple Claims in Civil Law - (ANSWER)In civil cases, many claims may be joined into a
single case.
Unanimous Verdict - (ANSWER)A requirement in criminal trials.
Investment Principle in Ponzi Schemes - (ANSWER)Often used to make interest payments.
Confidence in Ponzi Schemes - (ANSWER)Gaining others' confidence is one of the most
important elements of the con.
High Returns in Ponzi Schemes - (ANSWER)Promising abnormally high returns is how
fraudsters lure in investors.
One Claim in Criminal Law - (ANSWER)In criminal law, only one claim may be heard at a
time.
Page 1 of 22
,Improper Tax Filing - (ANSWER)Filing income tax that excludes income from fraud may be
considered an improper tax filing.
Characteristics of Civil Law - (ANSWER)Includes various claims in one action.
Elements of a Ponzi Scheme - (ANSWER)Gaining others' confidence, promising high returns,
and using investment principal to pay previous investors.
Consequences of Criminal Proceedings - (ANSWER)Include restitution and damage payments.
Elements of Title 26 - (ANSWER)Not reporting bribe income, excluding income from fraud, and
failure to report income from fraud.
Tax Evasion Grounds - (ANSWER)Not reporting bribe income or income from fraud.
Characteristics of Criminal Proceedings - (ANSWER)Involve a jury of 12 individuals and deal
with offenses against society.
Management fraud - (ANSWER)In its most common form, management fraud involves top
management's deceptive manipulation of financial statements.
Fraud proof requirement - (ANSWER)To succeed in a criminal or civil prosecution, it is usually
necessary to show that the perpetrator acted with intent to defraud the victim.
Most common type of occupational fraud - (ANSWER)Employee embezzlement is the most
common type of occupational fraud.
Characteristic of management fraud - (ANSWER)Management fraud often involves top
management's deceptive manipulation.
Negligence - (ANSWER)Negligence does not constitute fraud because it lacks intent to gain
advantage over the victim through false pretenses.
Preponderance of the evidence - (ANSWER)Preponderance of the evidence is what is proven in
any civil case and is not specific to fraud.
Confession from the perpetrator - (ANSWER)Confession is not required to prove fraud. In fact,
many perpetrators never admit their guilt.
Kickbacks or bribes - (ANSWER)These are examples of employee embezzlement.
Intent - (ANSWER)Intent is required to prove fraud, as opposed to error.
Financial statement fraud - (ANSWER)Management fraud is often referred to as financial
statement fraud.
Page 2 of 22
, Employee fraud - (ANSWER)Management fraud is not typically classified as employee fraud.
Investment fraud - (ANSWER)Management fraud is not typically classified as investment fraud.
Stockholder fraud - (ANSWER)Management fraud is not typically classified as stockholder
fraud.
Source of learning objectives - (ANSWER)6e revised is the source referenced for learning
objectives.
Date created - (ANSWER)The notes were created on 2/9/2024 at 6:36 AM.
Date modified - (ANSWER)The notes were modified on 2/9/2024 at 6:44 AM.
Learning objective FRAU.ALBR.25.1.5 - (ANSWER)Understand the differences between
criminal and civil fraud laws.
Learning objective FRAU.ALBR.25.1.3 - (ANSWER)Understand Different Types of Fraud.
Difficulty level of questions - (ANSWER)The difficulty levels of the questions vary between
easy and moderate.
Multiple choice question type - (ANSWER)The questions are formatted as multiple choice.
Variables in questions - (ANSWER)The questions do not have variables.
Feedback on answers - (ANSWER)Feedback is provided for each answer option in the questions.
Customer fraud - (ANSWER)Includes paying too little for goods received, not paying for goods
purchased, and deceiving the organization into giving the customer something that it should not.
Vendor fraud - (ANSWER)Involves participation of buyers from the company being defrauded,
false financial statement reporting by upper management, physical removal of inventory from the
business premises, and diversion of funds by an employee.
Government fraud statistics - (ANSWER)Published by agencies such as the FBI, FDIC, FTC,
and the IRS, these statistics are only related to their jurisdiction and do not provide a complete
picture of fraud.
Fraud statistics completeness - (ANSWER)Government agencies only publish those statistics
that are directly related to their jurisdictions, resulting in incomplete statistics.
Fraud seriousness - (ANSWER)Understanding the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
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