Fraud Detection CH 1-17 Exam Questions and Answers Fully Solved
Which of the following is the correct order for a fraud examiner to interview witnesses? -
AnswersNeutral third-parties, corroborative witnesses, co-conspirators, suspect
Which of the following is not one of the legs of the Fraud Triangle? - AnswersSituational environment
Samantha Lewis, CFE, is conducting an investigation into possible skimming of the accounts receivable at
Southwest Paint and Supply Co. If Lewis plans to interview all of the following parties, whom should she
interview first? - AnswersSean Miles, a regular customer of the company, whose complaint about his
account balance prompted the investigation
T/F Predication, although important, is not required in a fraud examination. - AnswersFalse
T/F In the 2012 Report to the Nations on Occupational Fraud and Abuse, the median loss in schemes
committed by males was higher than the median loss in schemes committed by females. - AnswersTrue
In the 2012 Report to the Nations on Occupational Fraud and Abuse, the category that committed the
smallest percentage of occupational fraud was: - AnswersOwners/Executives
T/F In the 2012 Report to the Nations on Occupational Fraud and Abuse, most perpetrators of fraud had
been previously charged with or convicted of a fraud-related offense. - AnswersFalse
In order to prove that fraud occurred, four elements must be present. Which of the following is not one
of those elements? - AnswersIntent to cause the victim damages
T/F In a fraud examination, evidence is usually gathered in a manner that moves from general to specific.
- AnswersTrue
Alice Durant works in the accounts payable department for the BC Group. She recently found out that
Della Granger, another A/P clerk, received a bigger raise than she did, even though Durant has been
with the company longer and frequently has to correct Granger's errors. Which leg of the Fraud Triangle
best applies to Durant's situation? - AnswersRationalization
____________________ is the theft of cash from a victim entity prior to its entry in an accounting
system. - AnswersSkimming
Which of the following techniques is not used to conceal sales skimming schemes? - AnswersRecording
false voids
Myra Manning, CFE, was hired to investigate some suspicious activity at Arizona Medical Supply after
one of the company's largest customers complained several times that its account statements do not
reflect all the payments it has made. While examining the accounts receivable activity, Myra noticed a
significant rise in the volume of overdue accounts during the last 6 months. What type of scheme might
this situation indicate? - AnswersReceivables skimming
,Methods of skimming sales include which of the following? - AnswersConducting unauthorized sales
after hours
Rigging the cash register so that the sale is not recorded
Posting a sale for less than the amount collected
Jason Herman works part-time as a retail clerk at a local bookstore. One night while his manager was
out of town, Jason decided to keep the store open for a few extra hours. He reset the cash registers at
the normal closing time, but continued making sales. Two hours later, when he closed for the night, he
reset the registers again, removing all evidence that any extra transactions had been made, and
pocketed the money from the after-hours sales. What kind of scheme did Jason commit? -
AnswersUnrecorded sales
George Albert was a property manager for a large apartment complex while he was going to college.
One of his duties was to collect rent from the tenants. If rent was paid after the third of the month, a
late fee was tacked on to the amount due. When a tenant paid his rent late, George would backdate the
payment, record and remit only the rent portion to his employers, and pocket the late fee. This is an
example of what type of fraud? - AnswersSales Skimming
Receivables skimming can be concealed through: - AnswersAll of the above:
Lapping
Force balancing
Document destruction
Anne Mullens is the bookkeeper for DWG Refrigeration Repair. One afternoon while she was preparing
the bank deposit, a customer came in to the office and paid his account in full with a $57 check. Rather
than adding the check to the deposit, Anne pocketed $57 cash from the previously recorded amount
and included the customer's check in the money to be taken to the bank. What type of scheme did Anne
commit? - AnswersSkimming
Sue Meyers was an accounts receivable clerk for an insurance broker. When premium payments were
received, she would steal the check of every tenth customer and cash it at a liquor store. To conceal her
scheme, she would credit the account of the customer that she stole from with a payment that was
received from another customer's account. This is an example of: - AnswersLapping
A method of concealing receivables skimming by crediting one account while abstracting money from a
different account is known as: - AnswersLapping
, The internal auditor for the Bremer Group recently ran a computer audit test that showed that Ouetzen
Company, one of the company's listed vendors, doesn't have a telephone number or a tax ID number. Of
the choices given, what type of fraud does this situation most likely indicate? - AnswersShell company
scheme
Sally Fuller is a buyer for GWA publishing company. Her job is to purchase supplies and services for the
printing of technical manuals. Her brother sets up a printing company, and Sally hires him to print most
of these manuals for GWA. However, rather than actually printing the manuals, her brother hires
another printer to do the work, then sells the printed manuals to GWA at a 50 percent markup. As a
result, his prices are much higher than the other printers who serve GWA. This type of scheme is most
likely a: - AnswersPass-through scheme
In the Fraud Tree, all of the following are categories of fraudulent disbursements except: - AnswersCash
larceny
In a shell company scheme, which of the following methods might a fraudster use to get a phony invoice
approved for payment? - AnswersCollusion
A "rubber stamp" supervisor
Falsification of purchase orders and receiving reports
In a ______________ scheme, the perpetrator uses false documentation to cause a payment to be
issued for a fraudulent purpose. - AnswersBilling
Fictitious entities created for the sole purpose of committing fraud are called: - AnswersShell companies
Eli Adams is an accounts payable clerk for MJF Productions. By forging signatures, he was able to
procure a company credit card. He recently bought home stereo equipment and put it on his company
credit card. When the credit card statement arrived at MJF, Eli prepared a check to the credit card
company and buried the purchase in the monthly expenses of the company's largest cost center,
knowing that his manager is generally inattentive when approving payments. What type of fraud is this?
- AnswersPersonal purchases scheme
Charles Dieter and Joey Davis worked together to steal nearly $50,000 from Valdosta Medical Supply.
Charles, an accounts payable clerk, deliberately overpaid a few of the company's vendors. He then called
the vendors, explained the "mistake," and asked for the excess to be refunded. Joey, a mailroom
employee, intercepted the incoming refund checks and cashed them. The two men split the proceeds.
What type of scheme did Charles and Joey commit? - AnswersPay-and-return
Categories of billing schemes include which of the following? - AnswersShell company schemes
Which of the following is the correct order for a fraud examiner to interview witnesses? -
AnswersNeutral third-parties, corroborative witnesses, co-conspirators, suspect
Which of the following is not one of the legs of the Fraud Triangle? - AnswersSituational environment
Samantha Lewis, CFE, is conducting an investigation into possible skimming of the accounts receivable at
Southwest Paint and Supply Co. If Lewis plans to interview all of the following parties, whom should she
interview first? - AnswersSean Miles, a regular customer of the company, whose complaint about his
account balance prompted the investigation
T/F Predication, although important, is not required in a fraud examination. - AnswersFalse
T/F In the 2012 Report to the Nations on Occupational Fraud and Abuse, the median loss in schemes
committed by males was higher than the median loss in schemes committed by females. - AnswersTrue
In the 2012 Report to the Nations on Occupational Fraud and Abuse, the category that committed the
smallest percentage of occupational fraud was: - AnswersOwners/Executives
T/F In the 2012 Report to the Nations on Occupational Fraud and Abuse, most perpetrators of fraud had
been previously charged with or convicted of a fraud-related offense. - AnswersFalse
In order to prove that fraud occurred, four elements must be present. Which of the following is not one
of those elements? - AnswersIntent to cause the victim damages
T/F In a fraud examination, evidence is usually gathered in a manner that moves from general to specific.
- AnswersTrue
Alice Durant works in the accounts payable department for the BC Group. She recently found out that
Della Granger, another A/P clerk, received a bigger raise than she did, even though Durant has been
with the company longer and frequently has to correct Granger's errors. Which leg of the Fraud Triangle
best applies to Durant's situation? - AnswersRationalization
____________________ is the theft of cash from a victim entity prior to its entry in an accounting
system. - AnswersSkimming
Which of the following techniques is not used to conceal sales skimming schemes? - AnswersRecording
false voids
Myra Manning, CFE, was hired to investigate some suspicious activity at Arizona Medical Supply after
one of the company's largest customers complained several times that its account statements do not
reflect all the payments it has made. While examining the accounts receivable activity, Myra noticed a
significant rise in the volume of overdue accounts during the last 6 months. What type of scheme might
this situation indicate? - AnswersReceivables skimming
,Methods of skimming sales include which of the following? - AnswersConducting unauthorized sales
after hours
Rigging the cash register so that the sale is not recorded
Posting a sale for less than the amount collected
Jason Herman works part-time as a retail clerk at a local bookstore. One night while his manager was
out of town, Jason decided to keep the store open for a few extra hours. He reset the cash registers at
the normal closing time, but continued making sales. Two hours later, when he closed for the night, he
reset the registers again, removing all evidence that any extra transactions had been made, and
pocketed the money from the after-hours sales. What kind of scheme did Jason commit? -
AnswersUnrecorded sales
George Albert was a property manager for a large apartment complex while he was going to college.
One of his duties was to collect rent from the tenants. If rent was paid after the third of the month, a
late fee was tacked on to the amount due. When a tenant paid his rent late, George would backdate the
payment, record and remit only the rent portion to his employers, and pocket the late fee. This is an
example of what type of fraud? - AnswersSales Skimming
Receivables skimming can be concealed through: - AnswersAll of the above:
Lapping
Force balancing
Document destruction
Anne Mullens is the bookkeeper for DWG Refrigeration Repair. One afternoon while she was preparing
the bank deposit, a customer came in to the office and paid his account in full with a $57 check. Rather
than adding the check to the deposit, Anne pocketed $57 cash from the previously recorded amount
and included the customer's check in the money to be taken to the bank. What type of scheme did Anne
commit? - AnswersSkimming
Sue Meyers was an accounts receivable clerk for an insurance broker. When premium payments were
received, she would steal the check of every tenth customer and cash it at a liquor store. To conceal her
scheme, she would credit the account of the customer that she stole from with a payment that was
received from another customer's account. This is an example of: - AnswersLapping
A method of concealing receivables skimming by crediting one account while abstracting money from a
different account is known as: - AnswersLapping
, The internal auditor for the Bremer Group recently ran a computer audit test that showed that Ouetzen
Company, one of the company's listed vendors, doesn't have a telephone number or a tax ID number. Of
the choices given, what type of fraud does this situation most likely indicate? - AnswersShell company
scheme
Sally Fuller is a buyer for GWA publishing company. Her job is to purchase supplies and services for the
printing of technical manuals. Her brother sets up a printing company, and Sally hires him to print most
of these manuals for GWA. However, rather than actually printing the manuals, her brother hires
another printer to do the work, then sells the printed manuals to GWA at a 50 percent markup. As a
result, his prices are much higher than the other printers who serve GWA. This type of scheme is most
likely a: - AnswersPass-through scheme
In the Fraud Tree, all of the following are categories of fraudulent disbursements except: - AnswersCash
larceny
In a shell company scheme, which of the following methods might a fraudster use to get a phony invoice
approved for payment? - AnswersCollusion
A "rubber stamp" supervisor
Falsification of purchase orders and receiving reports
In a ______________ scheme, the perpetrator uses false documentation to cause a payment to be
issued for a fraudulent purpose. - AnswersBilling
Fictitious entities created for the sole purpose of committing fraud are called: - AnswersShell companies
Eli Adams is an accounts payable clerk for MJF Productions. By forging signatures, he was able to
procure a company credit card. He recently bought home stereo equipment and put it on his company
credit card. When the credit card statement arrived at MJF, Eli prepared a check to the credit card
company and buried the purchase in the monthly expenses of the company's largest cost center,
knowing that his manager is generally inattentive when approving payments. What type of fraud is this?
- AnswersPersonal purchases scheme
Charles Dieter and Joey Davis worked together to steal nearly $50,000 from Valdosta Medical Supply.
Charles, an accounts payable clerk, deliberately overpaid a few of the company's vendors. He then called
the vendors, explained the "mistake," and asked for the excess to be refunded. Joey, a mailroom
employee, intercepted the incoming refund checks and cashed them. The two men split the proceeds.
What type of scheme did Charles and Joey commit? - AnswersPay-and-return
Categories of billing schemes include which of the following? - AnswersShell company schemes
