Good corporate governance practices:
A. Provide clear lines of accountability and reporting
B. Define the relationships and expectations of the parties involved
C. Ensure that no single party is capable of making all the business decisions
without influence, input, or approval of other parties
D. All of the above - ANSWER D. All of the above
Which of the following is TRUE regarding the responsibility and potential liability of
corporate officers and directors of U.S. companies with regard to fraud and
misconduct?
A. The failure to create an adequate compliance system could render a director
liable for losses caused by noncompliance
B. Officers and directors who are aware of potentially illegal conduct by senior
employees may be liable for any recurrence of similar misconduct
C. Corporations face stiff penalties for failing to redress apparent misconduct by
senior employees
D. All of the above - ANSWER D. All of the above
COSO identified five interrelated components of _________________.
A. Fraud
B. Ethical theories
C. Professional development
D. Internal control - ANSWER D. Internal control
The majority of people who commit occupational fraud are repeat offenders with
prior criminal records.
,A. True
B. False - ANSWER B. False
Which of the following is TRUE regarding the process of defining the objective of the
fraud risk management program?
A. Management should examine previous fraud occurrences to determine how the
ideal fraud risk management program would have prevented them
B. Management must balance the investment in anti-fraud controls with the benefit
of those controls and the amount of risk it is willing to accept
C. Management should express risk appetite in a manner that is appropriate for and
unique to the organization's culture and operations
D. All of the above - ANSWER D. All of the above
During an audit, auditors should validate that the organization is appropriately
managing the moderate-to-high fraud risks identified in the fraud risk assessment.
Ways to do so include:
A. Designing and performing tests to evaluate whether the identified controls are
operating effectively and efficiently
B. Identifying and mapping the existing controls that pertain to the moderate-to-high
fraud risks identified in the fraud risk assessment
C. Identifying within the moderate-to-high fraud risk areas whether there is a
moderate-to-high risk of management override of internal controls
D. All of the above - ANSWER D. All of the above
Which of the following influences the level of fraud risk faced by an organization?
A. The effectiveness of its internal controls
B. The geographic regions in which it operates
,C. The ethics of its leadership team
D. All of the above - ANSWER D. All of the above
In their studies, Clinard and Yeager found that mass-media publicity about law
violations was the most feared consequence of sanctions imposed on a corporation.
A. True
B. False - ANSWER A. True
In general, the lowest level of reference for making moral decisions is:
A. The law
B. Individual standards
C. Philosophical principles
D. None of the above - ANSWER A. The law
According to The Institute of Internal Auditors' International Standards for the
Professional Practice of Internal Auditing, the internal audit activity must evaluate
risk exposures relating to the organization's governance, operations, and information
systems regarding all of the following EXCEPT:
A. Sale of tangible and intangible assets
B. Effectiveness and efficiency of operations
C. Reliability and integrity of financial and operational information
D. Compliance with laws, regulations, and contracts - ANSWER A. Sale of tangible
and intangible assets
During a fraud risk assessment, the assessment team should consider:
A. Internal controls that might have been eliminated due to restructuring efforts
, B. Opportunities for collusion
C. The inherent limitations of internal controls
D. All of the above - ANSWER D. All of the above
According to a study conducted by Dr. Steve Albrecht, occupational crime
perpetrators who were interested primarily in "beating the system" committed larger
frauds than those who believed their pay was not adequate.
A. True
B. False - ANSWER A. True
According to COSO, the effectiveness of an overall system of internal controls can
be determined by assessing whether several specific components are in place,
functioning effectively, and operating together in an integrated manner.
A. True
B. False - ANSWER A. True
Which of the following represents one of the legs of the Fraud Triangle?
A. Perceived opportunity
B. Rationalization
C. Perceived non-shareable financial need
D. All of the above - ANSWER D. All of the above
Research shows that a criminal's social status or class is the determinant aspect of
white-collar crime.
A. True
B. False - ANSWER B. False
A. Provide clear lines of accountability and reporting
B. Define the relationships and expectations of the parties involved
C. Ensure that no single party is capable of making all the business decisions
without influence, input, or approval of other parties
D. All of the above - ANSWER D. All of the above
Which of the following is TRUE regarding the responsibility and potential liability of
corporate officers and directors of U.S. companies with regard to fraud and
misconduct?
A. The failure to create an adequate compliance system could render a director
liable for losses caused by noncompliance
B. Officers and directors who are aware of potentially illegal conduct by senior
employees may be liable for any recurrence of similar misconduct
C. Corporations face stiff penalties for failing to redress apparent misconduct by
senior employees
D. All of the above - ANSWER D. All of the above
COSO identified five interrelated components of _________________.
A. Fraud
B. Ethical theories
C. Professional development
D. Internal control - ANSWER D. Internal control
The majority of people who commit occupational fraud are repeat offenders with
prior criminal records.
,A. True
B. False - ANSWER B. False
Which of the following is TRUE regarding the process of defining the objective of the
fraud risk management program?
A. Management should examine previous fraud occurrences to determine how the
ideal fraud risk management program would have prevented them
B. Management must balance the investment in anti-fraud controls with the benefit
of those controls and the amount of risk it is willing to accept
C. Management should express risk appetite in a manner that is appropriate for and
unique to the organization's culture and operations
D. All of the above - ANSWER D. All of the above
During an audit, auditors should validate that the organization is appropriately
managing the moderate-to-high fraud risks identified in the fraud risk assessment.
Ways to do so include:
A. Designing and performing tests to evaluate whether the identified controls are
operating effectively and efficiently
B. Identifying and mapping the existing controls that pertain to the moderate-to-high
fraud risks identified in the fraud risk assessment
C. Identifying within the moderate-to-high fraud risk areas whether there is a
moderate-to-high risk of management override of internal controls
D. All of the above - ANSWER D. All of the above
Which of the following influences the level of fraud risk faced by an organization?
A. The effectiveness of its internal controls
B. The geographic regions in which it operates
,C. The ethics of its leadership team
D. All of the above - ANSWER D. All of the above
In their studies, Clinard and Yeager found that mass-media publicity about law
violations was the most feared consequence of sanctions imposed on a corporation.
A. True
B. False - ANSWER A. True
In general, the lowest level of reference for making moral decisions is:
A. The law
B. Individual standards
C. Philosophical principles
D. None of the above - ANSWER A. The law
According to The Institute of Internal Auditors' International Standards for the
Professional Practice of Internal Auditing, the internal audit activity must evaluate
risk exposures relating to the organization's governance, operations, and information
systems regarding all of the following EXCEPT:
A. Sale of tangible and intangible assets
B. Effectiveness and efficiency of operations
C. Reliability and integrity of financial and operational information
D. Compliance with laws, regulations, and contracts - ANSWER A. Sale of tangible
and intangible assets
During a fraud risk assessment, the assessment team should consider:
A. Internal controls that might have been eliminated due to restructuring efforts
, B. Opportunities for collusion
C. The inherent limitations of internal controls
D. All of the above - ANSWER D. All of the above
According to a study conducted by Dr. Steve Albrecht, occupational crime
perpetrators who were interested primarily in "beating the system" committed larger
frauds than those who believed their pay was not adequate.
A. True
B. False - ANSWER A. True
According to COSO, the effectiveness of an overall system of internal controls can
be determined by assessing whether several specific components are in place,
functioning effectively, and operating together in an integrated manner.
A. True
B. False - ANSWER A. True
Which of the following represents one of the legs of the Fraud Triangle?
A. Perceived opportunity
B. Rationalization
C. Perceived non-shareable financial need
D. All of the above - ANSWER D. All of the above
Research shows that a criminal's social status or class is the determinant aspect of
white-collar crime.
A. True
B. False - ANSWER B. False
