Fraud Prevention/Detection questions
well answered already passed
Internal Auditors detect _____ % of fraud - correct answer ✔✔14
Under the Corporate Sentencing Guidelines, when the offending organization has
committed a felony, probation must run for - correct answer ✔✔at least one year
Internal Auditing Standard 1220 states that internal auditors must apply the care
and skill expected of - correct answer ✔✔a reasonably prudent and competent
internal auditor
THREE levels of responsibility for finding and reporting illegal acts: - correct
answer ✔✔1. Evidence Accumulation w/ NO Reason to Believe Indirect-Effect
Illegal Acts Exist
2. Evidence Accumulation & Other Actions w/ REASON to Believe Direct or
Indirect-Effect Illegal Acts May Exist
3. Actions When the Auditor KNOWS of an Illegal Act
According to the joint IIA, AICPA, and ACFE publication Managing the Business Risk
of Fraud: A Practical Guide, who has responsibility for dealing with fraud risk? -
correct answer ✔✔Personnel at all levels of the organization
Restitution is not a form of punishment, but rather as a means of - correct answer
✔✔remedying the harm caused by the offense.
,fraud examiners _____ legally obligated to blow the whistle on clients or
employers. - correct answer ✔✔are NOT
As of 2005, judges ________ required to sentece w/in range set by USSC
guidelines - correct answer ✔✔are not
Most common type of occupational fraud - correct answer ✔✔Asset
Misappropriation
Three major categories of occupational fraud - correct answer ✔✔Corruption,
Asset Misappropriation, and Financial Statement Fraud
According to SarbOx this party is responsible for establishing procedures to handle
complaints regarding irregularities in a publicly traded company's accounting
methods, internal controls, or auditing matters - correct answer ✔✔Audit
Committee
Who is responsible for developing a strategy to assess and manage fraud risks that
aligns with the organization's risk appetite and strategic plans? - correct answer
✔✔The Board of Directors
Of the following parties, who is responsible for developing a strategy to assess and
manage fraud risks that aligns with the organization's risk appetite and strategic
plans? - correct answer ✔✔Board of Directors
,Under SarbOx, all audit committee members must be - correct answer
✔✔members of the BoD and "independent," meaning they receive compensation
only for their service on the board.
Both the NYSE and the NASDAQ rules state that: - correct answer ✔✔A majority
of the directors on a listed company's board must be independent.
"Under Section 404 of the Sarbanes-Oxley Act, public U.S. companies must include
all of the following in their annual report EXCEPT:
A.A statement identifying the framework used in performing the assessment of
the effectiveness of internal controls over financial reporting
B.A statement of management's responsibility for establishing and maintaining
adequate internal controls over financial reporting
C.A report explaining any discovered deficiencies in the company's internal
controls over financial reporting
D.Management's assessment of the effectiveness of the company's internal
controls over financial reporting" - correct answer ✔✔C.A report explaining any
discovered deficiencies in the company's internal controls over financial reporting
"Which of the following should be covered in employee anti-fraud training?
A.The exact procedures management uses to detect fraud
B.A detailed explanation of the company's anti-fraud controls
C.Examples of past transgressions and how they were handled
D.All of the above" - correct answer ✔✔C.Examples of past transgressions and
how they were handled
, "The findings in the ACFE's Report to the Nations on Occupational Fraud and
Abuse include which of the following?
A.The most commonly reported red flag displayed by fraud perpetrators prior to
the detection of their crime is being employed by the victim entity less than six
months.
B.The median losses caused by executives are lower than those caused by staff-
level employees.
C.More occupational frauds are committed by men than by women.
D.The majority of fraudsters have been previously convicted of a fraud-related
offense." - correct answer ✔✔C.More occupational frauds are committed by men
than by women.
A CFE ______ accept an assignment to uncover fraud in a company in which he
has a major interest. - correct answer ✔✔can
A fraud examiner _______ express an opinion on techincal matters - correct
answer ✔✔CAN
A fraud examiner _______ express an opinion about whether an individual is
legally guilty or innocent of a crime - correct answer ✔✔CANNOT
Sarbanes-Oxley Act provides ________ & __________ penalties for retaliating
against corporate whistleblowers. - correct answer ✔✔civil & criminal
The oversight of responsibilities of different parties for an organization's direction,
operations, and performance. - correct answer ✔✔Corporate Governance
well answered already passed
Internal Auditors detect _____ % of fraud - correct answer ✔✔14
Under the Corporate Sentencing Guidelines, when the offending organization has
committed a felony, probation must run for - correct answer ✔✔at least one year
Internal Auditing Standard 1220 states that internal auditors must apply the care
and skill expected of - correct answer ✔✔a reasonably prudent and competent
internal auditor
THREE levels of responsibility for finding and reporting illegal acts: - correct
answer ✔✔1. Evidence Accumulation w/ NO Reason to Believe Indirect-Effect
Illegal Acts Exist
2. Evidence Accumulation & Other Actions w/ REASON to Believe Direct or
Indirect-Effect Illegal Acts May Exist
3. Actions When the Auditor KNOWS of an Illegal Act
According to the joint IIA, AICPA, and ACFE publication Managing the Business Risk
of Fraud: A Practical Guide, who has responsibility for dealing with fraud risk? -
correct answer ✔✔Personnel at all levels of the organization
Restitution is not a form of punishment, but rather as a means of - correct answer
✔✔remedying the harm caused by the offense.
,fraud examiners _____ legally obligated to blow the whistle on clients or
employers. - correct answer ✔✔are NOT
As of 2005, judges ________ required to sentece w/in range set by USSC
guidelines - correct answer ✔✔are not
Most common type of occupational fraud - correct answer ✔✔Asset
Misappropriation
Three major categories of occupational fraud - correct answer ✔✔Corruption,
Asset Misappropriation, and Financial Statement Fraud
According to SarbOx this party is responsible for establishing procedures to handle
complaints regarding irregularities in a publicly traded company's accounting
methods, internal controls, or auditing matters - correct answer ✔✔Audit
Committee
Who is responsible for developing a strategy to assess and manage fraud risks that
aligns with the organization's risk appetite and strategic plans? - correct answer
✔✔The Board of Directors
Of the following parties, who is responsible for developing a strategy to assess and
manage fraud risks that aligns with the organization's risk appetite and strategic
plans? - correct answer ✔✔Board of Directors
,Under SarbOx, all audit committee members must be - correct answer
✔✔members of the BoD and "independent," meaning they receive compensation
only for their service on the board.
Both the NYSE and the NASDAQ rules state that: - correct answer ✔✔A majority
of the directors on a listed company's board must be independent.
"Under Section 404 of the Sarbanes-Oxley Act, public U.S. companies must include
all of the following in their annual report EXCEPT:
A.A statement identifying the framework used in performing the assessment of
the effectiveness of internal controls over financial reporting
B.A statement of management's responsibility for establishing and maintaining
adequate internal controls over financial reporting
C.A report explaining any discovered deficiencies in the company's internal
controls over financial reporting
D.Management's assessment of the effectiveness of the company's internal
controls over financial reporting" - correct answer ✔✔C.A report explaining any
discovered deficiencies in the company's internal controls over financial reporting
"Which of the following should be covered in employee anti-fraud training?
A.The exact procedures management uses to detect fraud
B.A detailed explanation of the company's anti-fraud controls
C.Examples of past transgressions and how they were handled
D.All of the above" - correct answer ✔✔C.Examples of past transgressions and
how they were handled
, "The findings in the ACFE's Report to the Nations on Occupational Fraud and
Abuse include which of the following?
A.The most commonly reported red flag displayed by fraud perpetrators prior to
the detection of their crime is being employed by the victim entity less than six
months.
B.The median losses caused by executives are lower than those caused by staff-
level employees.
C.More occupational frauds are committed by men than by women.
D.The majority of fraudsters have been previously convicted of a fraud-related
offense." - correct answer ✔✔C.More occupational frauds are committed by men
than by women.
A CFE ______ accept an assignment to uncover fraud in a company in which he
has a major interest. - correct answer ✔✔can
A fraud examiner _______ express an opinion on techincal matters - correct
answer ✔✔CAN
A fraud examiner _______ express an opinion about whether an individual is
legally guilty or innocent of a crime - correct answer ✔✔CANNOT
Sarbanes-Oxley Act provides ________ & __________ penalties for retaliating
against corporate whistleblowers. - correct answer ✔✔civil & criminal
The oversight of responsibilities of different parties for an organization's direction,
operations, and performance. - correct answer ✔✔Corporate Governance
