Questions and Answers of Fraud Examination

How many Rigas-related parties were in executive leadership roles at Adelphia?
What are the five principal categories of check tampering?
Which of the following is indicative of the actions of the forged maker perpetrator?1. Issues two checks for the same invoice and gets both signed by an authorized signatory.2. Issues two checks for
In what month and year did Adelphia file for bankruptcy?
Which of the following is not a method to deter, prevent, and detect the theft and alteration of outgoing accounts payable checks?1. Identify vendors with no mailing address or phone number.2.
For how many years was John Rigas sentenced to prison?
For a ghost employee, which of the following is not one of the four primary steps needed to make this scheme work?1. Delivery of the paycheck to the ghost2. Input a valid home address for the ghost3.
Which of the following is not a typical method that employees use to overstate legitimate expenses on their expense reports?1. Create receipts.2. Purchase an item at an inflated price and request
Which of the following red flags is commonly associated with fictitious expense reimbursement schemes?1. Patterns when expense reimbursements are for the same amount2. Ghost employees receiving
Which of the following red flags is seldom associated with cash register disbursement frauds?1. Excessive voids2. Uncashed personal checks in the cash drawer received from employees3. Excessive
A woman had two sons, who were born on the same hour of the same day of the same year, but they were not twins. How could this be?
Which of the following is a key attribute of corruption schemes?1. Corruption schemes usually involve an elected official.2. Corruption schemes usually involve an official operating in an official
In what year was the oil-for-food program established?
Jackson Enterprises does business in the United States and Venezuela. The Venezuela facility is located in Mariara and the Mayor of the city is Diego Ledezma. Assume that your data analytics
What made monitoring the oil-for-food program so difficult?
Assume that the deadline for the “Project X” bid solicitation is no later than 12 midnight on December 1, 20x5. The following is a data analytics summary of bid details for 20x4 and “Project
The following is the “inventory” of items received to continue the examination at Johnson Real Estate. In this chapter, the goal is to focus on the missing deposits: who, what, when, where, and
A woman came home with a bag of groceries, got the mail, and walked into the house. On the way to the kitchen, she went through the living room and looked at her husband, who had blown his brains
How do bribery and illegal gratuities differ?
Which of the following is most consistent with illegal gratuities?1. An illegal gratuity is not received as a result of an agreement to facilitate an action in advance of that action.2. An illegal
How much money was devoted to the oil-for-food program?
Why has winning convictions related to oil-for-food been so difficult?
What is meant by a conflict of interest?
Which of the following most accurately indicates why conflicts of interest create concern?1. In a conflict of interest, a person accepts illegal payments as a direct result of their actions.2. A
How many persons associated with the oil-for-food program have been indicted?
Describe the moral concerns associated with diverting money supposedly used to humanitarian needs to the pockets of a few individuals?
When did the oil-for-food program end?
What is the best way to prevent and detect conflicts of interest?1. An effective control environment, including an ethical “tone at the top”2. Segregation of duties3. Bank reconciliations4.
What event triggered the end of the oil-for-food program?
Which of the following best describes a key attribute of kickback schemes?1. Kickback schemes have no similarities to billing schemes.2. Kickback schemes usually involve at least one person inside
What was the name of the former U.N. Secretary General Boutros Boutros-Ghali’s brother-in-law who was indicted related to the oil-for-food scandal?
Which of the following is not correct regarding bid-rigging schemes?1. Bidding processes create an opportunity for bribery.2. Bid-rigging schemes can occur in the presolicitation phase.3. Lost bids
Explain what is meant by the human factor?1. The human factor means that all persons suffer from fits of bad judgment, which leads to fraud.2. Greed is the defining human factor.3. Human failings
Which of the following most accurately identifies the significance of the “perception of detection”?1. Fear of getting caught is a critical aspect of effective deterrence.2. Proactive fraud
Which of the following is most accurate with regard to fraud prevention and deterrence?1. Fraud can always be prevented but not deterred.2. Fraud deterrence is about creating an environment where
A woman shoots her husband. Then she holds him underwater for over five minutes. Finally, she hangs him. But five minutes later, they both go out together and enjoy a wonderful dinner. How can this
In June of 1990, how large was the capital infusion to facilitate Phar-Mor growth?
In a fraud case, why does each party (e.g., management, board, audit committee, auditors, lawyers, etc.) usually blame another party for the fraud?
The following is the “inventory” of items received to continue the examination at Johnson Real Estate. The goal is to focus on the missing deposits: who, what, when, where, and how.Documents
Can you create a graphic that highlights the employee who payroll was processed on Saturday and the dates of the process?
A married couple goes to a movie. During the movie the husband strangles the wife. He is able to get her body home without attracting attention. How?
Which of the following is not a common reason why senior management might overstate or understate business performance?1. Pressures to boost revenues or expenses2. Improperly designed incentive
Discuss the reasons for this phenomenon and explain the probable reasons why no one who knew about the fraud came forward to stop it?
Which of the following is not a methodology by which financial statement fraud is committed?1. Manipulation of revenue2. Manipulation of asset valuations3. Manipulation of disclosures4. Manipulation
Who was Phar-Mor’s Chief Financial Officer?
Consider your role as a junior accountant within a company or new staff member within an audit/tax professional services firm. How should you protect yourself from becoming an unwitting participant
What are the five classifications of financial statement fraud?
Which of the following is not one of the five major classifications of financial statement fraud?1. Fictitious revenues2. Improper disclosures3. Concealed liabilities4. Channel stuffing
On what date did Phar-Mor announce that David Shapiro would assume the duties of President and Mickey Monus Vice-Chairman?
Which of the following is not a fictitious revenue scheme?1. Matching expenses to revenues2. Premature revenue recognition3. Conditional sales4. Channel stuffing
How long was Mickey Monus’s prison sentence?
Is Mickey Monus now out of jail?
Of the following, choose the one that depicts a situation where liabilities and expenses are manipulated to make a company appear more profitable?1. Liabilities are capitalized to increase
Related to financial reporting disclosures, even when reported, which of the following still requires careful examination by the antifraud professional?1. Omitted liability disclosures2. Related
How may improper asset valuation inflate the current ratio?
Which improper asset valuation may inflate the current ratio?1. Valuing inventory at current retail prices2. Accounting for declines in fair market value of inventory3. Failing to record valuation
Which of the following is not likely to deter financial statement fraud?1. Reducing the amount of inventory on hand2. Establishing Board of Directors and Audit Committee oversight in line with
Given the four criteria necessary for a sale to be complete, which of the following is not one of those conditions?1. Delivery has occurred or services rendered.2. Cash has been collected.3. The
In what year was the original company formed?
Discuss why collusive frauds, especially when perpetrated among related parties, is particularly difficult to detect?
Is Fairmont in compliance with company policy that requires explicit approval of all hours of eighty hours or more.
Answer the following questions:1. Name at least five industries that might be affected by weather.2. Is it appropriate for the forensic accountant/fraud examiner to examine the effect of weather?
d that Fairmont is not in complianThe forensic audit has determinece with Federal withholding requirements for FICA and Medicare because FICA and Medicare were not withheld from employee paychecks
What is meant by inventory “shrinkage”?
Which of the following is not a technique to conceal inventory shrinkage?1. Counting and valuing the physical inventory at the end of each year 2. Writing off inventory after physical inventory
Which of the following is generally least effective in detecting noncash misappropriations?1. Physical inventory counts and inspections 2. Investigation of inventory shortages 3. Summarizing
For how much did Tyco settle their shareholder lawsuits?
In what prison system were the Tyco executives prosecuted?
Mr. Kozlowski forgave relocation loans given to 51 employees and paid their corresponding income taxes at a cost to Tyco shareholders of $96 million. How would you hypothesize that this act impacted
Analyze how the fraud triangle would be adjusted for collusive fraud teams.
List Cynthia Cooper’s two colleagues who assisted her with uncovering the WorldCom fraud.
Under what circumstances would a Miranda Warning be required?
Which of the following is not a means to a negotiated remedy?1. Arbitration 2. Mediation 3. Remediation 4. Out-of-court settlements
What was the name of Enron’s Internet trading venture?
Can the graphic highlight both the employee lacking the approval and the number of hours for each incident?
Assume that you have been asked to perform an examination and report on your findings, conclusions, and opinions. Assume the following:1. The industry is oil production (at a well-head),
Consider the following questions:1. Is it appropriate to examine whether the oil producer’s actions were justified?Why or why not?2. If oil quality is subjective, is it appropriate to examine oil
Is Fairmont in compliance with Federal withholding requirements for FICA and Medicare?
What is the difference between skimming and cash larceny?
Which of the following best describes skimming?1. Skimming involves the theft of cash after the cash is recorded in the company’s accounting system.2. Skimming involves the theft of cash prior to
Which of the following is not a method for committing and concealing a sales skimming scheme?1. Conducting sales during nonbusiness hours 2. Voiding sales transactions 3. Lapping 4. Cash register
Which of the following is not a methodology for the skimming of receivables and its related concealment?1. Voiding a sale after the customer leaves the premises 2. Accounts receivable write-offs 3.
Which of the following is generally the least effective methodology to detect sales or accounts receivable skimming?1. Count and summarize accounts receivable write-offs by employee.2. Periodically
Which of the following best describes the difference between skimming and cash larceny?1. Cash larceny is an “off-the-books” scheme, whereas skimming is an “on-the-books” scheme.2. Skimming
Which of the following is the least effective methodology to detect cash larceny?1. Correlate cash shortage details to voids and customer discounts by employees to identify unusual activity.2. Visit
Which of the following is a noncash asset misappropriation scheme?1. Skimming 2. Lapping 3. Kiting 4. Using a company computer to operate an Internet commerce site after business hours
Which of the following is not typically a methodology to conceal the misuse of noncash assets?1. Voiding sales at the warehouse liquidation location 2. Marking receiving documents as “short”3.
What event sparked the drop in the value of Tyco stock in 2002?
Who was the Tyco Chief Executive Officer at the time of the investigation?
How many shares of stock did Kozlowski and Swartz sell without proper disclosure?
What corporate governance body was criticized for failing to set appropriate standards of ethics, integrity, accounting, and corporate governance?
What kind of noncash asset misappropriation scheme was perpetrated by Mr. Kozlowski?
Why does the venue for the criminal prosecution matter? Given that Mr. Kozlowski was prosecuted in state court, how does he likely benefit and how is he likely to suffer in contrast to being
Assume that your data analytics examination related to voids and voided sales at a large retail location for the period of December 1 through 30 resulted in the following summary table. Also assume
Explain the relationship between an employee’s position and the level of theft.
Analyze how the fraud triangle would be adjusted for predator fraudsters.
Using the M.I.C.E. acronym, examine whether ideology, coercion, and ego/entitlement constitute frauds, given that the monetary benefit of the fraud to the perpetrator might be relatively small or
Explain the benefits of the triangle of fraud action in comparison to the fraud triangle in courtroom testimonial situations.
In the Albrecht Fraud Scale, which of the following is true?1. The fraud scale adds the characteristic of capability to the fraud triangle. 2. The fraud scale adds the characteristic of integrity to
Which of the following is not a behavioral indicator of fraud?1. Buying new luxury cars or wearing expensive jewelry 2. Acting irritable, defensive, or in a belligerent manner 3. Not taking

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