Question 1

Spoofing is which of the following?
A) Any fraud scheme involving a 3rd party
B) Changing the information in e-mail headers or IP addresses
C) Creating false vendors
D) Creating a false doctor during an insurance scam

Accepted Answer

B: Correct

Question 2

Locks on the doors to the computer room, is an example of which electronic control?
A) Biometrics
B) Independent checks on performance
C) Adequate separation of duties
D) Physical control over assets and records

Accepted Answer

A: Unique features of the human body to create secure access controls
B: Careful and continuous review of the other four e-business controls
C: Making sure that individuals who authorize transactions are different from those who actually execute them
D: Correct

Question 3

Which of the following is an important element of the control environment?
A) Integrity and ethical values
B) Board of directors and audit committee participation
C) Management's philosophy and operating style
D) All of the above

Accepted Answer

D: Answer: 'D' is correct. Implementation of each of the elements mentioned above will ensure a better control environment that will reduce the chance of fraud.

Question 4

According to the book, which 3 of the 5 traditional internal control elements are most important in ebusiness transactions?
A) Control environment, risk assessment and monitoring
B) Risk assessment, control activities and information & communication.
C) Control environment, risk assessment and control activities
D) Control activities, information & communication and monitoring.

Accepted Answer

A: Monitoring is not as important as control activities
B: Information & communication are not as important as risk assessment.
D: Missing control environment and risk assessment.

Question 5

Which of the following are controls over authorization of transactions and activities?
A) Passwords.
B) Digital Signatures.
C) Biometrics.
D) All of the above.

Accepted Answer

A: Because b and c are also correct answers
B: Because a and c are also correct answers
C: Because a and b are also correct answers

Question 6

Separation of duties falls under which of the following internal control element
A) Control activities
B) Risk assessment
C) Control environment
D) Monitoring

Accepted Answer

A: Correct
B: Incorrect - separation of duties is not under this element
C: Incorrect - separation of duties is not under this element
D: Incorrect - separation of duties is not under this element

Question 7

Which elements of E-commerce are not risks unique to E-commerce?
A) Cash flow constraints instigated by tremendous growth causing a need for more borrowing or issuing of stocks
B) More precise and frequent expectations by Wall Street, creating pressure to cook the books
C) Anonymous transactions
D) Invisible businesses-You don't know the size, or the location
E) A and B

Accepted Answer

A: A is true but not the only one
B: B is true but not the only one
C: C is incorrect because it is unique to ecommerce
D: D is incorrect as well because it is unique to e commerce
E: E is correct because both A and B existed, just not so blatantly before this new economy

Question 8

The best way to reduce fraud in an e-business environment is to focus on _______?
A) Customer transactions
B) Reducing opportunities through the implementation of appropriate internal controls
C) Designing new fraud-proof technologies
D) Apply Benford's law

Accepted Answer

A: While it may be a control it is not the best general way to reduce fraud since most fraud occurs from within an organization
C: There is no such thing as a fraud-proof technology
D: Method to detection but not of control

Question 9

Which of the following is a unique risk for e-commerce?
A) Merger or acquisition activity, which creates pressures to "improve the reported financial results"
B) Unproven or flawed business models, with tremendous cash flow pressures.
C) Borrowing or issuing stock, which adds additional pressures to "cook the books"
D) All of the above

Accepted Answer

A: answer because b and c are also unique risks of e-commerce
B: answer because a and c are also unique risks of e-commerce
C: answer because a and b are also unique risks of e-commerce

Question 10

Which of the following uses features of the human body to create secure access controls?
A) Biometrics
B) Spoofing
C) Biological Signatures
D) Physical science controls

Accepted Answer

B: Information changed in ip or email headers
C: This is a fabricated term
D: This is a fabricated term

Question 11

What is the most important aspect of internal control?
A) The personnel
B) The board and audit committee participation
C) A controlled system
D) All of the above are equally important aspects of internal control

Accepted Answer

A: A is correct.
B: B is incorrect because the board delegates responsibility of internal controls to management. Of course, the board needs to be strong and be involved in controls, but the board and audit committee participation is not the most important aspect of internal controls.
C: C is incorrect because if employees are competent and trustworthy, other controls can be absent, and reliable transactions will still result. Honest people are able to perform at a high level, even when there are few other controls to support them. Dishonest people can reduce to shambles a system with numerous controls in place.
D: D is incorrect because the personnel are the most important aspect of internal control.

Question 12

Which is the most secure method of computer authorization?
A) Digital Signatures
B) Passwords
C) Biometrics
D) Voice activation

Accepted Answer

C: Correct: Biometrics is the most secure method of authorization. Voice activation was not discussed in chapter 15 but voices can be recorded and played back to a computer.

Question 13

Identify the true statement about control activities in an e-business environment.
A) Although the same types of control activities are used, they are not as effective in e-business.
B) Adequate separation of duties is not as important in e-commerce as it is in traditional brick-and-mortar businesses.
C) Proper authorization is a key control in e-business - passwords, firewalls, digital signatures and certificates, and biometrics are especially important and must be carefully monitored.
D) A and C only
E) All of the above

Accepted Answer

B: Separation of duties is just as important in e-commerce, because the most common frauds in purchasing and sales transactions are kickbacks and bribery.

Question 14

Viewing information that passes along a network communication channel is referred to as:
A) Falsified Identify
B) Spoofing
C) Sniffing
D) Hijacking

Accepted Answer

A: This equates to customer impersonation or pretending to be someone you are not.
B: Spoofing is changing the information in an email header or an IP address to hide identifies.
C: Sniffing is the illegal or unauthorized viewing of information as it passes along a network communication channel.
D: Used to trick users into sending information to a business other than the one intended by the user.

Question 15

What is biometrics?
A) A signature sent over the internet
B) Using unique features of the human body to create secure access controls
C) A medical device that forces subjects to tell the truth during interviews
D) Complex information systems implementation

Accepted Answer

B: Correct

Question 16

Which is not a method of proactive e-commerce fraud prevention?
A) Encryption
B) Firewalls
C) Digital Signatures
D) Biometrics
E) All of the above

Accepted Answer

E: Correct: All of these help prevent e-commerce fraud.

Question 17

All of the following make it easier for perpetrators within an organization to commit e-commerce fraud =except:
A) They know the control environment
B) They understand security mechanisms
C) They find ways to bypass security
D) All of the above

Accepted Answer

D: Correct; all of the above make it easier for perpetrators within an organization to commit e-commerce fraud

Question 18

The process for detecting E-Business fraud is similar to detecting other types of fraud except:
A) E-business is a different type of business than brick-and-mortar companies and must be understood prior to detecting fraud.
B) E-business doesn't have the same fraud risks of other companies
C) E-business fraud symptoms constantly change and cannot be narrowed down
D) E-business fraud detection works best when the queries are automated so that they examine every business transaction and business relationship.

Accepted Answer

D: Correct: The question asks for the process differences. A (understand the company) is the first step in detecting fraud, B (identify fraud risks) is the second step, C (identify symptoms) is the third step, D (automating queries is the difference between E-Business and other businesses for fraud detection.

Question 19

Which activity is used legitimately by companies to monitor network traffic, but may also be used illegally to capture confidential information?
A) Sniffing
B) Spoofing
C) Hijacking
D) Impersonation

Accepted Answer

B: Spoofing involves altering e-mail headers or ip addresses, an act that has little productive use
C: Hijacking involves mimicking names of popular internet host names. Programmers sometimes use this during development, but A is much more popular
D: Customer impersonation occurs when customers falsify their identities and make fraudulent purchase requests, an act that has little productive use

Question 20

Traditional ___ reduces the risk of falsified identity.
A) CSS (Cascading Style Sheets)
B) EDI (Electronic Data Interchange)
C) WWW (World Wide Web)
D) SQL (Structured Query Language)

Accepted Answer

B: Correct; Falsified identity is less of a concern in traditional electronic data interchange (EDI) settings because traditional EDI uses relatively limited access points, dedicated lines, and established value-added network providers as intermediaries.

Quiz 17: Fraud in E-Commerce

Spoofing is which of the following?

Locks on the doors to the computer room, is an example of which electronic control?

Which of the following is an important element of the control environment?

According to the book, which 3 of the 5 traditional internal control elements are most important in ebusiness transactions?

Which of the following are controls over authorization of transactions and activities?

Separation of duties falls under which of the following internal control element

Which elements of E-commerce are not risks unique to E-commerce?

The best way to reduce fraud in an e-business environment is to focus on _______?

Which of the following is a unique risk for e-commerce?

Which of the following uses features of the human body to create secure access controls?

What is the most important aspect of internal control?

Which is the most secure method of computer authorization?

Identify the true statement about control activities in an e-business environment.

Viewing information that passes along a network communication channel is referred to as:

What is biometrics?

Which is not a method of proactive e-commerce fraud prevention?

All of the following make it easier for perpetrators within an organization to commit e-commerce fraud =except:

The process for detecting E-Business fraud is similar to detecting other types of fraud except:

Which activity is used legitimately by companies to monitor network traffic, but may also be used illegally to capture confidential information?

Traditional ___ reduces the risk of falsified identity.