Foothill College Midterm #2: M16 Fraud Examination Sections 01W. Quiz Score: 170 out of 200 (Guarantees Over 85%)

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Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 1/19 Midterm #2 Due Jul 3 at 11pm Points 200 Questions 40 Ava... ilable Jul 1 at 7am - Jul 3 at 11pm 3 days Time Limit 60 Minutes Instructions Attempt History Attempt Time Score LATEST Attempt 1 47 minutes 170 out of 200 Correct answers will be available on Jul 4 at 12am. Score for this quiz: 170 out of 200 Submitted Jul 3 at 8:50pm This attempt took 47 minutes. This exam consists of 40 questions. Each question is worth 5 points. You will see one question at a time. Please select the ONE option that BEST answers each question. After you are done with all 40 questions, click on "Finish". You can only submit the exam ONCE. You have 60 minutes to complete and submit the test. Your time limit STARTS AS SOON AS YOU BEGIN the test. Once you start the exam, you CAN log off during the test or leave for a break, but this will count towards your 60 minutes time limit. For example, you CANNOT work on the exam for 30 minutes in the morning and one 30 minutes in the evening. ° Question 1 5 / 5 pts From the statements below, which of the following is not true regarding sampling risk? To reduce sampling risk, the investigator can increase the sample size.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 2/19 Sampling risk cannot be quantified, and can only be slightly reduced by careful planning of the sampling procedure. To reduce sampling risk, the investigator can use a random number table. In fraud examination, sampling risk can be significant. Question 2 5 / 5 pts You are a fraud investigator on an engagement. The sample you have selected for your testing is not representative of the population as a whole. This is known as__________ Compliance risk Non-sampling risk Systematic risk Sampling risk Question 3 5 / 5 pts _________ are issued by grand juries to compel people to turn documents over to authorities. writs of certiorari search warrants voluntary consents subpoenas7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 3/19 Incorrect Question 4 0 / 5 pts The ____________ describes the route evidence takes from the time it is collected until the investigation is completed and identifies everyone that has access to it along the way. coordination of evidence Chain of custody organization of evidence mark of evidence Incorrect Question 5 0 / 5 pts You are a fraud investigator on an engagement. You examine a fraudulent check and do not recognize it as being fraudulent when in fact it is a fraudulent check. This is known as _________ . systematic risk non-sampling risk sampling risk systemic risk7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 4/19 Question 6 5 / 5 pts A compliance officer at a bank suspects fraudulent activity in the account of a wealthy client. The compliance officer decides a SAR needs to be created. In this context, what does the acronym SAR stand for? Suspicious activity report System Activity Report Subject access request Synthetic aperture radar Second Assessment Report Question 7 5 / 5 pts You are a fraud invesƟgator on an engagement. Your interviewee becomes withdrawn, uncooperaƟve, and embarrassed during the interview. This is a sign of the _____stage to the reacƟon of a crisis. Anger Depression Denial Rationalization Question 8 5 / 5 pts7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 5/19 Which of the below statements is not true concerning polygraphs? Individuals who pass polygraph tests are probably innocent Failure to pass the test implies certain guilt. They rarely detect psychopathic liars Polygraphs are more complicated than voice stress analyzers Investigators must inform suspects that they do not have to take a polygraph Question 9 5 / 5 pts You are a fraud invesƟgator on an engagement. During which stage of the reacƟonary process to a crisis would you expect your witness(suspect) to be the most cooperaƟve? acceptance anger bargaining depression Question 10 5 / 5 pts You are a fraud invesƟgator on an engagement. During an interview with a witness you use volume, pitch, and voice quality to convey meaning. This is a form of _____7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 6/19 Paralinguistic communication Chronemic communication Kinetic communication Proxemic communication Question 11 5 / 5 pts IdenƟfy the typical sequence that an individual has to a crisis. Rationalization, anger, depression, acceptance, denial Denial, depression, anger, rationalization, acceptance Rationalization, depression, anger, denial, acceptance Denial, anger, rationalization, depression, acceptance Question 12 5 / 5 pts You are a fraud invesƟgator on an engagement. During an interview with a witness, you consciously control the length of your pauses between sentences and the rate of your speech. You are employing a form of __________ Proxemic communication. Paralinguistic communication.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 7/19 Kinetic communication. Chronemic communication. Question 13 5 / 5 pts Graphology is __________ the study of handwriting for the purpose of character analysis. the process by which we obtain release from unpleasant emotional tensions by talking about the source of these tensions. using answers to pencil-and-paper honesty tests to elicit information about a person's honesty and code of ethics. voice stress analysis for the purpose of determining whether a person is lying. Question 14 5 / 5 pts _________is the use of body movement to convey meaning. Proxemic communication. Kinetic communication. Paralinguistic communication. Chronemic communication.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 8/19 Question 15 5 / 5 pts The process by which we obtain release from unpleasant emotional tensions by talking about the source of these tensions is called ____ Negation Acceptance Denial Catharsis Question 16 5 / 5 pts You are a fraud invesƟgator on an engagement. During an interview with a witness, you control the length of Ɵme aŌer the respondent finishes a sentence before posing another quesƟon. This is called_____ Silent probe Manipulating Theme development Admission-seeking Question 17 5 / 5 pts Which of the below statements is true of a leading quesƟon?7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 9/19 It is confusing and suggests an answer opposite to the correct one. It contains the answer in it. It should not confirm known facts. It is not easily understood. Incorrect Question 18 0 / 5 pts An employee in a company commiƩed fraudulent acts. The General Manager, who was not involved in the fraud, thought the employee’s acƟons were almost jusƟfiable. This is an indicaƟon that the General Manager is in the _____ stage of crisis reacƟon. Acceptance Rationalization Denial Depression Question 19 5 / 5 pts The main objective of the net worth method is to determine_________ the change in the net worth. the extent of the stolen funds. the income and expenditure of an individual.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 10/19 the financial position of the organization. Incorrect Question 20 0 / 5 pts The net worth method is ineffective in some situations. Identify one these situations from the options below. It gives a conservative estimate of stolen funds which are not readily accepted as evidence by courts. It rarely facilitates obtaining confessions from the suspects. When people have income, they either purchase additional assets, pay off liabilities, or improve their lifestyle, thus increasing living expenses. Embezzlers typically spend their money on food, jewelery, vacation, and other luxuries that are difficult to track. Question 21 5 / 5 pts You are a fraud investigator working on an engagement. From the options below, why would you conduct a conversion search? To determine the extent of embezzlement. To identify how perpetrators conceal frauds. To develop a vulnerability chart.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 11/19 To understand the suspect’s reaction to crisis. Question 22 5 / 5 pts The Gramm-Leach Bliley Act of 1999 prohibits________ public from accessing the criminal database of FBI. customers to opt out of information sharing. the use of false pretenses to access the personal information of others. telemarketers from selling information to corporations. Question 23 5 / 5 pts From the options below, which is not one of the major credit reporting agencies? TransUnion Equifax ProQuest Experian Question 24 5 / 5 pts7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 12/19 You are a fraud investigator working on an engagement. You decide to search through the suspect’s garbage. When would this be considered a legal activity? When the trash is in the possession of the suspect. When the trash is left unattended inside the suspect’s home. Searching through a person's trash is never considered as a legal activity. When the trash has left the suspect's home or sidewalk. Question 25 5 / 5 pts You are a fraud invesƟgator on an engagement. During your invesƟgaƟon you found the effecƟve dates on stock opƟons were deliberately changed for the purpose of securing extra pay for management. This is called________ Backdating Arbitrage LEAP Backtracking Question 26 5 / 5 pts ____________ is(are) a common method of providing executive compensation by allowing top management to purchase stock at a fixed share price.7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 13/19 Stock splits Arbitrage Stock options Dividends Question 27 5 / 5 pts The ability to anƟcipate a fraud perpetrator’s likely method of concealing a fraud is called __________ Zero-order reasoning Strategic reasoning Deductive reasoning Low-order reasoning Question 28 5 / 5 pts From the opƟons below, select the example of a perceived opportunity that could lead to financial statement fraud. Inadequate internal controls Inability to compete with other companies Independent audit and a strong board of directors7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 14/19 Thinking that fraud is good for the company Question 29 5 / 5 pts What is it called when a company sells unused assets for a promise to buy them or similar assets back at roughly the same price? Channel stuffing Round-tripping Bill-and-hold sales Kiting Question 30 5 / 5 pts What type of analysis are you performing if you are examining percentage changes in account balances from period to period? Variance analysis Vertical analysis Statement mapping Horizontal analysis Question 31 5 / 5 pts7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 15/19 "Topside" journal entries are often used to commit financial statement fraud. Which of the following statements regarding these entries is not true? The journal entry may be recorded after normal business hours. The entries often bypass the normal process for posting the journal entries. The entries are recorded on subsidiary ledgers. Upper management usually records the journal entry. Question 32 5 / 5 pts If ending inventory is overstated, cost of goods sold is _____and net income is _____________ overstated; understated No effect; understated understated; overstated overstated; overstated Question 33 5 / 5 pts From the options below, which will not understate liabilities? Understate accounts payable Understate accrued liabilities7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 16/19 Recognize earned revenue as unearned revenue Underrecord future obligations Question 34 5 / 5 pts From the options below, which applies to a “cookie jar?” Overstated current assets Recording fictitious revenues Understated accounts payable Overstated reserves Question 35 5 / 5 pts You are a fraud investigator on an engagement. The company you are investigating recognized unearned revenue as earned revenue. This is an example of which type of fraud? Cost of goods sold understatement Assets overstatement Revenue understatement Liability understatement7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 17/19 Question 36 5 / 5 pts Why are “asset overstatement” frauds easier to detect than other types of financial statement fraud? Because sufficient information will be provided in the notes to financial statements. Because overstated assets are always included on the balance sheet. Because of the off-book nature of the asset fraud. Because asset overstatements are almost always quite significant. Question 37 5 / 5 pts Check tampering is what type of occupational fraud? skimming fraudulent disbursement scheme larceny fraudulent statement scheme Incorrect Question 38 0 / 5 pts Which sentence is true concerning an illegal gratuity and a bribery scheme?7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 18/19 Compared to illegal gratuities, briberies occur relatively infrequently and are usually quite small. Illegal gratuities always involves the use of actual or threatened force, fear, or economic duress. Illegal gratuities are made before deals are approved. Illegal gratuities do not necessarily involve an intent to influence a business decision but rather to reward someone for making a favorable decision. Incorrect Question 39 0 / 5 pts According to the ACFE study, the highest percentage of asset misappropriation occurs through _____________. fraudulent disbursement larceny skimming delayed payment recognition Question 40 5 / 5 pts A customer at a bank wishes to deposit $12,000 in cash. The bank will most likely file a _________ with __________. SAR; the FBI7/3/2016 Midterm #2: M16 Fraud Examination Sections 01W https://foothillcollege.instructure.com/courses/1130/assignments/12265/submissions/9811 19/19 CTR; FinCEN CTR; the IRS 8300; the IRS SAR; the IRS [Show More]

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