CFE || QUESTIONS WITH COMPLETE SOLUTIONS!!
Probable future economic benefits obtained or controlled by a particular entity as a result of
past transactions or events correct answers Asset
recognized and accepted by state insurance departments in evaluating the solvency of an
insurer for statutory accounting purposes correct answers Admitted assets
These types of assets do not contribute to an insurer's solvency as measured by statutory
accounting requirements correct answers Non-admitted assets
Any securities representing a creditor relationship, whereby there is a fixed schedule for
one or more future payments correct answers Bonds
If the price is higher than par, the excess is the ____________; if the price is lower than
par, the deficiency is the ____________. correct answers bond premium ; bond discount
The amount the owner expects to receive when the bond matures correct answers Par value
The amount of the impairment is the difference between the net fair value (appraised) value
less estimated costs to sell) of the collateral and the insurer's recorded investment in: correct
answers mortgage
True or False: Any real estate which is owned by and more than 50 percent occupied (based
on rentable square footage) by an insurer and its' affiliates is considered property occupied by
the company. correct answers True
A market quote or an appraisal is used to determine what of property held for sale? correct
answers current fair value
What must be present for a fraud to exist? correct answers A material false statement,
knowledge that the statement was false when it was uttered, and reliance on the fast statement
by the victim.
A person is said to be in ________ act, when the business which he transacts, or the money or
property which he handles, is not for his own benefit, but for another person: correct answers
Fiduciary Capacity
An actual or constructive taking away of the goods or property of another with the without
the consent and against the will of the owner and with a felonious intent. correct answers
Larceny
Larceny by Fraud or deception means that: correct answers Creates or reinforce a false
impression, fails to correct a false impression, and fails to disclose a known lien, adverse
claim or other legal impediment
In Cressey's fraud triangle, its three legs are: correct answers Opportunity, Pressure and
Rationalization
,The seller's price to the buyer is not fixed or determinable when: correct answers The
transaction includes an option to exchange the product for others.
Basic types of non-sharable problems? correct answers Violation of ascribed obligations,
Business reversals, Physical Isolation
One of the simplest ways to justify unacceptable conduct and avoid guilt feelings is to invent
a good reason for correct answers Embezzling
Which of the following offender types in which people who take the money and run away?
correct answers Absconders
True or False: When situational pressures and perceived opportunities are low and personal
integrity is high, occupational fraud is much more likely to occur. correct answers False
In Fraud scale pressure, opportunity and integrity variables all results in a list of ___ possible
red flags or indicators of occupational fraud and abuse. correct answers 82
__________ can be defined as conduct detrimental to the organization and to the employee.
correct answers Employee deviance
______________ is required not only for theft, but for procedures to detect errors, avoid
waste and insure a proper amount of inventory is maintained. correct answers Inventory
control
Perceived certainty of detection is directly related to employee theft for respondents in all
industry sectors; the stronger the perception that theft would be detected, the more the
likelihood that the employee would engage in deviant behavior. correct answers False
According to Hollinger and Clark for Policy development, management must pay attention
to: correct answers A clear understanding regarding theft behavior and enforcement of
sanctions
_________ is defined as a person who works for the victim organization and who is primary
culprit correct answers Principal perpetrator
According to a survey, in principal perpetrator, males in a majority of cases, accounting for
___ percent of frauds versus ___ percent in which a female was the primary culprit. correct
answers 61 versus 39
True or False: Organizations that had external audits actually had higher median losses and
longer lasting fraud schemes than those organizations that were not audited. correct answers
True
A ____________ can be very costly for an organization to undertake, both in terms of money
and time spent. correct answers Civil lawsuit
_____________ involves purposeful misreporting of financial information about the
organization that is intended to mislead those who read it. correct answers Fraudulent
statement
, True or False: Asset misappropriation schemes are more common than fraudulent statements
and more costly than corruption. correct answers False
According to Marshall, ______ are probable future economic benefits obtained or controlled
by a particular entity as a result of past transactions or events. correct answers Assets
Assets that are long-lived and that differ from property, plant and equipment that has been
purchased outright or acquired under a capital lease correct answers Intangible Assets
An asset capable of being perceived & capable of being appraised correct answers Tangible
Asset
_________ normally are carried on an organization's books as expenses because they tend to
be consumed by the organization within a year of purchase. correct answers Supplies
Amounts which are owned to other entities correct answers Liabilities
The difference between assets and liabilities correct answers Equities
The seller's price to the buyer is not fixed or determinable when correct answers The
transaction includes an option to exchange the product for others.
Allows the owner, investors, creditors and others with an interest to know the appropriate
book worth of the business at a particular date. correct answers Balance Sheet
Occupational fraud and abuse is a (an) __________ of doing business, in much the same way
that we pay expenses for electricity, taxes and wages. correct answers Expense
When expenses used to produce income- all of them- should be matched in a consistent
manner against that income correct answers Accrual basis accounting
True or False: Depreciation is especially applicable when companies try to overvalue their
assets and net worth; the lower their depreciation expense, the higher the company's profits.
correct answers True
Any expenses that are incurred but not paid by the end of the year are counted in our records
of profit and loss correct answers Accruals
The heart of book keeping system correct answers Checkbook
A day-by-day, or chronological, record of transactions correct answers Journal
A journal in which all sales made on credit or cash are listed correct answers Accounts
receivable journal
A summary of the account balances carried in a ledger correct answers Financial statement
A process by which a bookkeeper records all transactions and can adjust the books. correct
answers Journal Entries
Probable future economic benefits obtained or controlled by a particular entity as a result of
past transactions or events correct answers Asset
recognized and accepted by state insurance departments in evaluating the solvency of an
insurer for statutory accounting purposes correct answers Admitted assets
These types of assets do not contribute to an insurer's solvency as measured by statutory
accounting requirements correct answers Non-admitted assets
Any securities representing a creditor relationship, whereby there is a fixed schedule for
one or more future payments correct answers Bonds
If the price is higher than par, the excess is the ____________; if the price is lower than
par, the deficiency is the ____________. correct answers bond premium ; bond discount
The amount the owner expects to receive when the bond matures correct answers Par value
The amount of the impairment is the difference between the net fair value (appraised) value
less estimated costs to sell) of the collateral and the insurer's recorded investment in: correct
answers mortgage
True or False: Any real estate which is owned by and more than 50 percent occupied (based
on rentable square footage) by an insurer and its' affiliates is considered property occupied by
the company. correct answers True
A market quote or an appraisal is used to determine what of property held for sale? correct
answers current fair value
What must be present for a fraud to exist? correct answers A material false statement,
knowledge that the statement was false when it was uttered, and reliance on the fast statement
by the victim.
A person is said to be in ________ act, when the business which he transacts, or the money or
property which he handles, is not for his own benefit, but for another person: correct answers
Fiduciary Capacity
An actual or constructive taking away of the goods or property of another with the without
the consent and against the will of the owner and with a felonious intent. correct answers
Larceny
Larceny by Fraud or deception means that: correct answers Creates or reinforce a false
impression, fails to correct a false impression, and fails to disclose a known lien, adverse
claim or other legal impediment
In Cressey's fraud triangle, its three legs are: correct answers Opportunity, Pressure and
Rationalization
,The seller's price to the buyer is not fixed or determinable when: correct answers The
transaction includes an option to exchange the product for others.
Basic types of non-sharable problems? correct answers Violation of ascribed obligations,
Business reversals, Physical Isolation
One of the simplest ways to justify unacceptable conduct and avoid guilt feelings is to invent
a good reason for correct answers Embezzling
Which of the following offender types in which people who take the money and run away?
correct answers Absconders
True or False: When situational pressures and perceived opportunities are low and personal
integrity is high, occupational fraud is much more likely to occur. correct answers False
In Fraud scale pressure, opportunity and integrity variables all results in a list of ___ possible
red flags or indicators of occupational fraud and abuse. correct answers 82
__________ can be defined as conduct detrimental to the organization and to the employee.
correct answers Employee deviance
______________ is required not only for theft, but for procedures to detect errors, avoid
waste and insure a proper amount of inventory is maintained. correct answers Inventory
control
Perceived certainty of detection is directly related to employee theft for respondents in all
industry sectors; the stronger the perception that theft would be detected, the more the
likelihood that the employee would engage in deviant behavior. correct answers False
According to Hollinger and Clark for Policy development, management must pay attention
to: correct answers A clear understanding regarding theft behavior and enforcement of
sanctions
_________ is defined as a person who works for the victim organization and who is primary
culprit correct answers Principal perpetrator
According to a survey, in principal perpetrator, males in a majority of cases, accounting for
___ percent of frauds versus ___ percent in which a female was the primary culprit. correct
answers 61 versus 39
True or False: Organizations that had external audits actually had higher median losses and
longer lasting fraud schemes than those organizations that were not audited. correct answers
True
A ____________ can be very costly for an organization to undertake, both in terms of money
and time spent. correct answers Civil lawsuit
_____________ involves purposeful misreporting of financial information about the
organization that is intended to mislead those who read it. correct answers Fraudulent
statement
, True or False: Asset misappropriation schemes are more common than fraudulent statements
and more costly than corruption. correct answers False
According to Marshall, ______ are probable future economic benefits obtained or controlled
by a particular entity as a result of past transactions or events. correct answers Assets
Assets that are long-lived and that differ from property, plant and equipment that has been
purchased outright or acquired under a capital lease correct answers Intangible Assets
An asset capable of being perceived & capable of being appraised correct answers Tangible
Asset
_________ normally are carried on an organization's books as expenses because they tend to
be consumed by the organization within a year of purchase. correct answers Supplies
Amounts which are owned to other entities correct answers Liabilities
The difference between assets and liabilities correct answers Equities
The seller's price to the buyer is not fixed or determinable when correct answers The
transaction includes an option to exchange the product for others.
Allows the owner, investors, creditors and others with an interest to know the appropriate
book worth of the business at a particular date. correct answers Balance Sheet
Occupational fraud and abuse is a (an) __________ of doing business, in much the same way
that we pay expenses for electricity, taxes and wages. correct answers Expense
When expenses used to produce income- all of them- should be matched in a consistent
manner against that income correct answers Accrual basis accounting
True or False: Depreciation is especially applicable when companies try to overvalue their
assets and net worth; the lower their depreciation expense, the higher the company's profits.
correct answers True
Any expenses that are incurred but not paid by the end of the year are counted in our records
of profit and loss correct answers Accruals
The heart of book keeping system correct answers Checkbook
A day-by-day, or chronological, record of transactions correct answers Journal
A journal in which all sales made on credit or cash are listed correct answers Accounts
receivable journal
A summary of the account balances carried in a ledger correct answers Financial statement
A process by which a bookkeeper records all transactions and can adjust the books. correct
answers Journal Entries
