Chapter 5: ACC-4800-001

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ACC-4800 Quizzes Chapter 5

Chapter 5
Instructions:
Score for this quiz: 40 out of 51 Submitted May 13 at 1:45pm This attempt took about 21 hours. Question 1: 1 pts Which statement is false? Fighting fraud calls for prevention as the first step and the preferred tactic. 0% of points Often misappropriation is accomplished by false or misleading records or documents. 0% of points Accountants are perhaps the most valuable employee-fraud fighters. 0% of points None of the above. 100% of points Government entities are generally not targets for fraudsters. 0% of points 0/1 Question 2: 1 pts The most common method of detecting occupational fraud is: Tips. 100% of points Accident. 0% of points External auditors. 0% of points Some other method. 0% of points Internal auditors. 0% of points 1/1 Question 3: 1 pts A company has a 22% profit margin and has employee fraud of $220,000. Calculate the additional revenue needed to offset this lost income. $720,000. 0% of points $540,000. 0% of points $820,000. 0% of points $1,000,000. 100% of points Some other amount. 0% of points $1,000,000 ($220,000 / 0.22). 1/1 Question 4: 1 pts You are told that a company has a 20% profit margin and the discovered fraud has caused $1,400,000 more needed revenue to cover the fraud. How much was stolen? $1,400,000. 0% of points Some other amount. 0% of points $280,000. 0% of points $560,000. 0% of points $7,000,000. 100% of points

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.20 ($1,400,000). 0/1 Question 5: 1 pts Which is an incorrect statement? None of the above is incorrect. 0% of points Cash flow analysis may indicate fraud and embezzlement. 0% of points Theft is similar to embezzlement. 100% of points Gross profit analysis may catch skimming and money laundering. 0% of points Cash is the favorite target of fraudsters. 0% of points Theft and larceny are different than embezzlement. 1/1 Question 6: 1 pts Which technique is considered to be an "off-book" fraud? Understated sales. 0% of points Theft of incoming checks. 0% of points Skimming. 0% of points All of the above. 100% of points Unrecorded sales. 0% of points 0/1 Question 7: 1 pts Which scheme is considered to be skimming? Theft of incoming checks. 0% of points All of the above. 100% of points Understated sales. 0% of points Swapping checks for cash. 0% of points Unrecorded sales. 0% of points 0/1 Question 8: 1 pts Building up balances in bank accounts based upon floating checks drawn against similar accounts in other banks is best called: Skimming. 0% of points Money laundering. 0% of points Kiting. 100% of points None of the above. 0% of points Lapping. 0% of points 1/1 Question 9: 1 pts Skimming can be caught by: Surprise cash counts. 0% of points Investigating customers' complaints. 0% of points

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Comparing receipts with deposits. 0% of points Gross profit analysis. 0% of points All of the above. 100% of points 1/1 Question 10: 1 pts What is a red flag of kiting? Large deposits on Fridays. 0% of points Items a, b, and c. 100% of points Only a and c. 0% of points Frequent deposits and checks in the same amount. 0% of points Short time lag between deposits and withdrawals. 0% of points 1/1 Question 11: 1 pts What audit step would be most appropriate for finding accounts receivables fraud? Reviewing customer complaints. 100% of points All of the above. 0% of points Surprise cash counts. 0% of points Gross profit analysis. 0% of points A bank reconciliation audit. 0% of points 0/1 Question 12: 1 pts A person on the payroll who does not work for that company is generally called: Lapping. 0% of points Ghost employee. 100% of points None of the above. 0% of points Missing employee. 0% of points Kiting. 0% of points 1/1 Question 13: 1 pts A person finds land, buys it, increases the price, and sells it to his company. What is this scheme? Bid rigging. 0% of points All of the above. 0% of points Land flip. 100% of points A ghost scheme. 0% of points Ponzi scheme. 0% of points 1/1 Question 14: 1 pts Joseph Wells believes that the most powerful audit technique is:

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Confirming account receivables. 0% of points Surprise cash counts. 0% of points Strong internal controls. 0% of points Diligent inquiry. 100% of points None of the above. 0% of points 1/1 Question 15: 1 pts Select the true answer. To prevent fraud, the entity may choose to: Develop a written code of ethics. 0% of points Use background checks when hiring employees. 0% of points Require an annual interview by internal auditors, security, or others of suspicious employees. 0% of points Prosecute discovered fraud, as an example to other employees. 0% of points All of the above are true. 100% of points 1/1 Question 16: 1 pts In a 2002 Wells Report, which was the most effective in preventing fraud? Regular fraud audit. 0% of points Some other techniques. 0% of points Background checks of new employees. 0% of points Strong internal controls. 100% of points Ethical training for employees. 0% of points 1/1 Question 17: 1 pts Which factor would not indicate a fraud warning sign for not-for-profit organizations? Deterioration of key ratio. 0% of points Regular deferral of capital expenditures. 0% of points Expense accounts are decreasing. 100% of points Increase in amount owed to creditors. 0% of points Non-payment of insurance premiums. 0% of points The reverse of c would be a warning sign. 1/1 Question 18: 1 pts Which factor would not indicate a fraud warning sign for not-for-profit organizations? No separation of check writing and check signing. 0% of points Significant decline in turnover. 0% of points Qualification in the auditor's report. 0% of points Employee morale is high. 100% of points Resignation of key staff member.

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0% of points Warning sign is low morale. 1/1 Question 19: 1 pts Which is a bankruptcy for municipalities? Chapter XI. 0% of points Chapter 9. 100% of points Both b and c. 0% of points Chapter 11. 0% of points Chapter 7. 0% of points 1/1 Question 20: 1 pts Which would be considered a negative trend for a municipality? The ratio of Cash and Investments divided by Current Liabilities is increasing over time. 0% of points Unreserved Fund Balance divided by Gross Expenditures ratio is decreasing over time. 100% of points Operating Surplus is increasing over time. 0% of points All of the above. 0% of points Fixed Costs less Personal Services and Debt Services is decreasing over time. 0% of points 1/1 Question 21: 1 pts Which would be considered a negative trend for a governmental unit? Long-term Debt divided by Assets ratio is increasing. 100% of points Unrestricted Net Assets divided by Expenses ratio is increasing. 0% of points Change in Net Assets divided by Total Net Assets ratio is increasing. 0% of points General Revenues plus Transfers divided by Expenses ratio is increasing. 0% of points All of the above. 0% of points 1/1 Question 22: 1 pts Which would be considered a negative trend for a governmental unit? Debt outstanding greater than 90% of the debt limit. 100% of points None of the above is a negative trend. 0% of points Property taxes greater than 65% of the tax limit. 0% of points Short-term interest and current year-end service greater than 15% of total revenue. 0% of points Unreserved fund balance percentages increasing over time. 0% of points 1/1 Question 23: 1 pts Which of the following auditors is least interested in the materiality concept? External auditor. 0% of points Forensic auditor. 100% of points

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Internal auditor. 0% of points All of the above. 0% of points GAO auditor. 0% of points 1/1 Question 24: 1 pts Which statement is false? The quick ratio omits receivables and amounts due from other funds and governments. 0% of points The combined financial statement is the main focus of the Comprehensive Annual Financial Report (CAFR). 0% of points None of the above. 0% of points The greater the fund balance as a percentage of revenue, the more likely the government will be able to overcome problems caused by revenue shortfalls. 0% of points A large state government considers a quick ratio of more than 50% as an indicator of potential fiscal stress. 100% of points 1/1 Question 25: 1 pts Forensic accountants should compare travel and expense vouchers to employment records and tax records in order to find: All of the above. 0% of points Lapping. 0% of points Kiting schemes. 0% of points Ghost employees. 100% of points Layering schemes. 0% of points 1/1 Question 26: 1 pts You should trace bank transfers for the latter part of an audit period and the early part of the subsequent period to determine whether: The cash receipts journal was held open for a few days after the end of the year. 0% of points The cash balances were overstated because of kiting. 100% of points The last checks recorded before the year-end were really mailed by year-end. 0% of points None of the above. 0% of points Any unusual payments to or receipts from related parties occurred. 0% of points 1/1 Question 27: 1 pts What audit procedures would not be highly effective for detecting fraud in the sales and collection cycle? Observe the actual distribution of payroll checks to employees. 100% of points None of the above. 0% of points Review monthly bank reconciliations. 0% of points Ascertain appropriate segregation of duties. 0% of points Verify accounts receivable balances. 0% of points 1/1 Question 28: 1 pts What audit procedure would not be highly effective for detecting fraud in the payroll cycle?

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Sample personnel files and physically observe personnel. 0% of points Observe the actual distribution of payroll checks to employees. 0% of points Verify accounts receivable balances by positive confirmations. 100% of points None of the above. 0% of points Observe the duties of employees being performed. 0% of points 1/1 Question 29: 1 pts Cash fraud, inventory fraud, fixed asset fraud, payables and disbursement fraud, and payroll fraud are all examples of: Financial reporting fraud. 0% of points The fraud triangle. 0% of points Misappropriation of assets. 100% of points Management fraud. 0% of points None of the above. 0% of points 1/1 Question 30: 1 pts According to published research by PricewaterhouseCoopers, larger companies rather than smaller companies tend to be: More likely to be victims of economic crime. 100% of points More likely to be perpetrators of corporate crime. 0% of points More likely to systematically discover fraud in their organization. 0% of points None of the above. 0% of points More likely to be victims of computer crime. 0% of points 1/1 Question 31: 1 pts Lapping is defined as: Replacing new inventory with old. 0% of points Taking kickbacks. 0% of points False credits, discounts, and write-offs. 0% of points None of the above. 0% of points Stealing a customer's payment and concealing the theft by applying subsequent payments from other customers to the first customer's account. 100% of points 1/1 Question 32: 1 pts Kickbacks commonly occur in all of the following except: Construction and property management companies. 0% of points None of the above. 0% of points Accounts receivable department records returns. 100% of points Purchasing agent in charge of awarding contracts. 0% of points Shipping department in which a customer pays an employee to ship a higher quality of goods than ordered. 0% of points

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0/1 Question 33: 1 pts Accounts receivable fraud prevention controls include all of the following except: Requiring supervisory approval before customers are added to or deleted from the master file. 0% of points Requiring supervisory approval for all credit memos and write-offs. 0% of points Requiring investment documents to be sent only to upper management for safekeeping. 100% of points Placing a credit limit on customer accounts to immediately flag when exceeded. 0% of points None of the above. 0% of points 1/1 Question 34: 1 pts Which of the following might produce an investigative "lead" or "red flag"? All of the above. 100% of points The suspicions of an internal auditor. 0% of points Item found on the Internet. 0% of points Laboratory analysis of physical evidence. 0% of points Anonymous letter or e-mail about the crime. 0% of points 1/1 Question 35: 1 pts Which type of investigative technique works best at accumulating evidence to build a legal case against a financial fraudster? Surveillance. 0% of points Invigilation. 0% of points Informants. 0% of points All of the above. 100% of points Interviewing. 0% of points 1/1 Question 36: 1 pts The typical audit trail connects what to what? Source documents to cross-referenced documents. 100% of points Transaction documents to summary documents. 0% of points Horizontal analysis to vertical analysis. 0% of points Both b and c. 0% of points Balances to payables and receivables. 0% of points 0/1 Question 37: 1 pts Which is not a journal entry fraud symptom? Lost cash register tapes. 0% of points Lacking supporting documents. 0% of points Unexplained adjustments. 0% of points

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None of the above. 100% of points Out-of-balance. 0% of points 0/1 Question 38: 1 pts Which is a unique factor for solving a white-collar crime? Availability of witnesses. 0% of points Tracing of assets. 100% of points Desires of victims. 0% of points Financial losses. 0% of points Both c and d. 0% of points 1/1 Question 39: 1 pts Which item would a forensic accountant go to first in order to investigate the source of a suspicious transaction? Budget. 0% of points Cash register receipts. 0% of points Either a or b. 0% of points Journal. 0% of points Ledger. 100% of points 0/1 Question 40: 1 pts Payroll and employee reimbursement fraud schemes include all of the following except: Embezzling withholding. 0% of points None of the above. 0% of points Company credit card fraud. 0% of points Ghost employees. 0% of points Unauthorized borrowing. 100% of points 0/1 Question 41: 1 pts Misappropriation of inventory may be detected by one of the following: None of the above. 0% of points Analyzing the year-end bank reconciliation for outstanding checks. 0% of points Increasing the integration of technology into the business process. 0% of points Reconciling the accounts receivable subsidiary ledger to the general ledger. 0% of points Calculating and analyzing the gross profit margin. 100% of points 0/1 Question 42: 1 pts ____________ requires keeping detailed records before and after the ____________ period to determine the amount of fraud. Tracing, entity. 0% of points

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Timeline, entity. 0% of points Genogram, genogram. 0% of points Entity, entity. 0% of points Invigilation, invigilation. 100% of points 1/1 Question 43: 1 pts What information is not needed to perform a check spread? Date. 0% of points Check number. 0% of points Amount. 0% of points All are needed. 100% of points Payee. 0% of points 1/1 Question 44: 1 pts A ____________ chart is a pictorial display of personal relationships among related or unrelated parties. Invigilation. 0% of points Link. 0% of points Genogram. 100% of points Entity. 0% of points None of the above. 0% of points 1/1 Question 45: 1 pts A fraud investigation should not be commenced without proper ____________. Motivation. 0% of points Conviction. 0% of points Timing. 0% of points Some other event. ' 0% of points Predication. 100% of points 1/1 Question 46: 1 pts

Which group is the source of more tips on a hotline?

Customers. 0% of points Employees. 100% of points Competitors. 0% of points Vendors. 0% of points Shareholders/owners. 0% of points 1/1

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Question 47: 1 pts

Which department or division in an organization probably has more fraud?

Operating. 0% of points Marketing. 0% of points Sales. 0% of points Accounting. 100% of points Purchasing. 0% of points 1/1 Question 48: 1 pts

Which is the highest fraud industry?

Mining. 0% of points Financial services. 100% of points Global manufacturing. 0% of points Computer. 0% of points Petroleum. 0% of points 1/1 Question 49: 1 pts

According to the ACFE group, which is the best fraud control?

Job rotation. 0% of points Hotlines. 0% of points Internal audits. 100% of points Rewards to employees. 0% of points Mandatory vacations. 0% of points 1/1 Question 50: 1 pts

Which group probably is not an important element of a fraud risk program?

Audit Committee. 0% of points None of the above. 100% of points Board of Directors. 0% of points Internal Audit Department. 0% of points Management. 0% of points 1/1 Question 51: 1 pts

According to 2008 CFEs, which was the primary reason for fraud in an organization?
Override of existing internal controls. 0% of points Poor tone at the top. 0% of points Lack of management review. 0% of points

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Lack of internal controls. 100% of points Lack of competent oversight. 0% of points 1/1

Quiz Score: 40 out of 51

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