Question 1

The most common occupational frauds in small businesses involve employees doing all of the following EXCEPT:

Accepted Answer

The most common occupational frauds in small businesses involve skimming revenues, fraudulently writing company checks, and processing fraudulent invoices. Altering financial statements is not as common of an occupational fraud in small businesses.

Question 2

Which of the following examples is NOT a billing scheme?

Accepted Answer

The answer of Which of the following examples is NOT...

Question 3

Which of the following is NOT one of the most common types of billing schemes?

Accepted Answer

C) Overbilling the company for travel and other related business expenses, such as business lunches, hotel bills, and air travel, is more commonly associated with expense reimbursement fraud rather than being classified as a billing scheme. Billing schemes typically involve the manipulation of the accounts payable system, such as through the creation of fictitious vendors or altering invoices, rather than the manipulation of expense reports.

Question 4

What is known as the net asset value (NAV)?

Accepted Answer

The net asset value (NAV) is the closing price of the securities that comprise a particular fund's portfolio plus the value of any uninvested cash that the fund manager maintains for the fund. It represents the per-share price of the mutual fund or exchange-traded fund (ETF) and is calculated by dividing the total value of the fund's holdings by the number of shares outstanding.

Question 5

Which of the following is an example of a register-disbursement scheme?

Accepted Answer

A register-disbursement scheme involves manipulating the register to create false disbursements, such as processing fictitious returns to steal cash.

Question 6

Two basic fraudulent register disbursement schemes are:

Accepted Answer

False refunds and false voids are two basic fraudulent register disbursement schemes where employees create fraudulent refunds or voids to steal money from the company. False refunds involve issuing fictitious refunds to themselves or friends/family members, while false voids involve voiding legitimate transactions and keeping the money.

Question 7

Identify the most common conflict of interest schemes.

Accepted Answer

Purchase schemes and sales schemes are common conflict of interest schemes where employees may have a hidden interest in a vendor or customer, leading to biased decision-making.

Question 8

Which function of the victim company is usually involved in Kickback schemes?

Accepted Answer

The purchasing department of the victim company is usually involved in kickback schemes as they have the authority to make purchasing decisions and can be lured into accepting bribes or kickbacks from vendors in exchange for preferential treatment during the selection process.

Question 9

According to the ACFE study described in the text,which fraudulent disbursement scheme occurs most frequently?

Accepted Answer

Billing schemes are the most common type of fraudulent disbursement scheme according to the ACFE study.

Question 10

Thefts of inventory are divided into two groups.Identify them.

Accepted Answer

The two groups of inventory theft are larceny and misuse. Larceny is the physical theft of inventory while misuse involves the intentional misappropriation of inventory or using inventory in an unauthorized manner. The other answer choices are incorrect as they refer to different types of crime or schemes.

Question 11

For ghost-employee fraud schemes to work,four things must happen.Which of the following is NOT one among them?

Accepted Answer

A member of Human Resources being involved in the fraud is not a necessary condition for ghost-employee fraud schemes to work. However, the other three conditions listed are essential for the fraud to be successful.

Question 12

Which of the payroll fraud scheme listed below tend to generate the largest losses?

Accepted Answer

Ghost employee schemes involve the creation of a fictitious employee on the payroll who does not actually work for the company. Fraudsters can create bogus employment records for these ghost employees and collect their paychecks, resulting in significant losses over time. This scheme tends to generate the largest losses as the fraudster can collect fraudulent payments for an extended period without being detected.

Question 13

Identify the statement that does NOT represent one of the four types of corruption.

Accepted Answer

This statement describes a type of fraud, not corruption. Corruption involves the abuse of power for personal gain or to benefit someone else. Fraud involves deception or misrepresentation for personal gain.

Question 14

Which department or group accounted for the maximum percentage of fraud incidents according to the study conducted by ACFE in 2010?

Accepted Answer

According to the ACFE's 2010 Report to the Nations, the accounting department was responsible for the highest percentage of fraud incidents.

Question 15

Identify the two basic bribery schemes.

Accepted Answer

Kickbacks and bid-rigging are the two basic bribery schemes. Kickback is a form of bribe in which money or gifts are given to someone in exchange for a favor or some kind of service. Bid-rigging involves an agreement between two or more bidders to rig the bidding process in favor of a particular bidder, thereby defrauding the process and gaining an unfair advantage. The other choices do not relate to the basic bribery schemes.

Question 16

Employees,vendors,and customers of organizations have three opportunities to steal assets.Which of the following is NOT one among them?

Accepted Answer

Paying off public officials or company insiders for preferential treatment is not an opportunity for employees, vendors, or customers to steal assets. It is a form of bribery and corruption. The other options (A, B, and C) are all ways in which employees, vendors, or customers could steal assets from an organization.

Question 17

Which of the following statements with reference to extortion is true?

Accepted Answer

Extortion is a crime regardless of whether the message is received or not. The act of making the threat is enough to constitute extortion.

Question 18

Claiming personal travel as a business expense,a personal lunch as a business lunch,altering a receipt to reflect a higher amount than was actually paid,or submitting fictitious receipt is an example of which of the following?

Accepted Answer

The behavior described is characteristic of an expense reimbursement scheme, which involves an employee submitting false or inflated expense reports in order to obtain reimbursement for personal expenses incurred under the guise of legitimate business expenses.

Question 19

Which of the following is the best example of theft of cash through skimming?

Accepted Answer

Skimming involves diverting or stealing cash before it is recorded in the accounting system. Understating sales by recording larger-than-reality sales discounts is a form of skimming because it involves taking cash off the top before sales are fully recorded.

Question 20

Check tampering is unique among the disbursement frauds because:

Accepted Answer

Check tampering involves the perpetrator physically preparing a fraudulent check. This is different from other disbursement frauds such as billing schemes or payroll schemes where the perpetrator generates false documents or manipulates the company's payment process. Additionally, in check tampering, the perpetrator does not need to take company cash or merchandise, reducing the risk of getting caught.

Quiz 14: Fraud Against Organizations