Fraud Examination Exam 2 Graded A+

Fraud Examination Exam 2 Graded A+
A database of criminal records maintained by the FBI is:
A. The CIA.
B. The III.
C. The NCIC.
D. Both a and c.
E. Both b and c. - ANSWER-E

A letter is most likely to be fraudulent if:
A. It is signed by only one person.
B. It is addressed to an individual, rather than a department.
C. It is a photocopy of an original letter.
D. It is written on outdated company letterhead. - ANSWER-C

A snapshot of active memory should be done:
A. Before seizure of the computer.
B. After seizure of the computer but before turning off the computer.
C. After turning off the computer but before calculation of the checksum number.
D. After calculation of the checksum number but before searching. - ANSWER-B

A vulnerability chart:
A. Forces investigators to explicitly consider all aspects of a fraud.
B. Shows the history of fraud in a company.
C. Identifies weaknesses in every aspect of a company's internal control.
D. Gives a detailed record of all the movements and activities of the suspect. -
ANSWER-A

A. Theft Investigative Methods
1. Surveillance and covert operations
2. Invigilation
3. Seizing and searching computers
4. Physical evidence

B. Conversion Investigative Methods
1.Searching public records
2. Online resources
3. The net worth method

C. Inquiry Investigative Methods
1. Interviews and interrogation
2. Honesty testing

D. Concealment Investigative Methods
1. Document examination

,2. Audits
3. Electronic searches
4. Physical asset counts - ANSWER-Fraud Triangle plus inquiry model

Although most perpetrators begin their thefts because of a perceived critical need, they
usually continue to embezzle in order to:
A. Beat the system.
B. Fulfill an inner desire to commit fraud.
C. Improve their lifestyle.
D. Achieve a higher self-esteem. - ANSWER-C

An increase in a person's net worth plus living expenses equals the person's total
income - ANSWER-True

Analytical anomalies are present in every fraud. - ANSWER-False

Analytical fraud symptoms are the least effective way to detect fraud - ANSWER-False

As fraud perpetrators become more confident in their fraud schemes, they steal and
spend increasingly larger amounts - ANSWER-True

As long as a sample is selected randomly, it will always be representative of the
population as a whole - ANSWER-False

Assets minus Liabilities - ANSWER-Net worth

Auditors can best help detect fraud in conversion. - ANSWER-False

Bates numbers are identifying numbers used by attorneys involved in litigation to track
all documents - ANSWER-True

Because of the nature of fraud, auditors are often in the best position to detect its
occurrence. - ANSWER-False

Before financial institutions can sell or disclose confidential customer information, they
must provide customers with the opportunity to "opt out" from information sharing -
ANSWER-True

Chain of custody refers to:
A. Marking on a document so it can be identified later.
B. A record of when a document is received and what has happened to it since its
receipt.
C. Databases used in trials to assist lawyers.
D. The way in which courts are organized. - ANSWER-B

Change in Net Worth During X2

, Add: Expenditures During X2

Minus: Known Income in X2 - ANSWER-Unknown Income

Concealment investigative methods sometimes involve the study of documents that
have been manipulated - ANSWER-True

Concealment is the covering of tracks, obscuring of evidence, and removal of red flags
to hide a perpetrator's fraud - ANSWER-True

Conversion investigations focus on how suspects:
A. Had opportunities to steal.
B. Had motives to commit fraud.
C. Spent stolen money.
D. Committed the actual theft. - ANSWER-C

Conversion is the third element of the fraud (investigation) triangle - ANSWER-True

Counties and other local agencies that contain records are usually not useful in fraud
investigations - ANSWER-False

Discovery sampling is probably the most difficult of all statistical sampling variations to
understand - ANSWER-False

Discovery sampling:
A. Is a type of variables sampling.
B. Is one of the more difficult statistical smpling methods to understand.
C. Is never used in conducting a fraud examination.
D. Deals with the probability of discovering at least one error in a given sample size if
the population error is a certian percentage. - ANSWER-D

Documentary evidence such as private tax returns can usually be obtained only by:
A. Subpoena.
B. Search warrant.
C. Voluntary consent.
D. All of the above. - ANSWER-D

During invigilation, no controls are imposed on any activities - ANSWER-False

Each of these agencies is correctly matched with the type of information the agency
provides except:
A. Department of Justice: Maintains records relating to the detection, prosecution, and
rehabilitation of offenders.
B. The Secret Service: Deals with counterfeiting, theft of government checks, interstate
credit card violations, and some computer crimes.