1. Management attitudes concerning risk are evaluated using which framework?

SAS No. 99 fraud risk assessment The SOX Act of 2002 managerial assessments COSO internal control environment Fraud risk assessment model

2. You are investigating a fraud case and decide to use graphics software to assist you in the case. Your purpose is to analyze changes in the organizational structure of the scheme over time. Which type of graphics software would you use?

Flow diagram Timeline Association matrix Data presentation

3. Which group of people are best able to observe symptoms of fraud?

Coworkers External auditors Suppliers Customers

4. You are in the beginning stages of interviewing a fraud suspect and so far he has been cooperative in answering all of your questions. Which interview step should you use next to increase your goal of a successful interview?

Begin admission-seeking questions Move on to more complex questions Continue to ask nonthreatening questions Bring in your partner and begin interrogating the suspect

5. How would Analysts Notebook software assist you in your fraud case?

Identify key suspects Organize data into databases Produce electronic spreadsheets Identify unacceptable transactions

6. A retail home improvement chain had decreased profitability in the past 6 months due to bad debts. In order to increase sales, store managers have allowed customers to make large credit purchases without a credit review. Which type of internal control is missing from the chains internal control system?

Separation of duties Documentation Authorization Independent checks

7. You are a fraud examiner and have been hired by a company to make recommendations on reducing the risk of fraud. What suggestion would you make for reducing the opportunity for fraud?

Reduce company communications to employees Implement bonuses based on earnings Discipline fraud offenders Eliminate cross training of employees

8. You have begun a formal company ebezzelment case that is proving to be rather complex as it involves two companies and several dummy companies as well as multiple relationships between suspects and assets. Which tool would you use to help you organize all this information?

An association matrix A computer CD ACL audit analytics software Link chart

9. Which of the following procedures provides the greatest cost-benefit savings to a company?

Fraud occurrence Fraud detection Fraud investigation Fraud prevention

10. What is an advantage of using data analysis software as a fraud detection tool?

Data analysis software is useful for analyzing small groups of data Data analysis software reports cannot be altered Data analysis software inquiries may produce false results Data analysis software can analyze the entire population

11. ABC Company has hired you to recommend some fraud prevention techniques in light of a large embezzlement case uncovered at the company. In your interviews of employees, you found that many were unclear about determining whether certain scenarios were unethical or not. What is one recommendation you would make to management in this situation?

Implement strong internal controls Require review of the code of conduct Require mandatory vacations of every employee Hire more ethical employees in the future

12. You work in the fraud prevention department of a large bank and have just received an anonymous tip that the CFO is embezzling assets from the bank. You interview several bank employees, who report no unusual behavior in the CFO and no changes in his lifestyle. However, one employee did state that the CFO has gone on a number of European cruises. You look into the CFOs financial information and find there is a minimal amount of unknown income. What should you do next?

Interview the CFO to obtain more information Determine the cost of the European cruises Contact his family and friends for clues Close the file as there appears to be no change in lifestyle

13. What is an internal auditors role in detecting fraud?

Evaluating the internal control system Conducting investigations of employee fraud Maintaining the internal control system Report suspicions of fraud to management

14. An internal auditor at a financial services firm suspects a stock broker of wrongdoing. If you had serious suspicions of fraud in this case, how would you start your investigation?

Analyze excessive absences Examine patterns in transaction times and days, examining digital signatures on all documents Interview colleagues Check public records

15. John owns a car rental agency in Florida. His rental agency shows the following data Sales revenue $40,000 Expenses 30,00 Net income 10,000

How much sales would John have to generate in order to recover from a $2,000 fraud loss?

$2,000 $4,000 $8,000 $10,000

16. You are a fraud examiner and are preparing to interview a fraud suspect. In what order will you perform the following interview steps?

1. Ask general questions

2. Ask for suspects help in investigation

3. Ask specific questions

4. Establish a connection with the suspect

5. Ask for more details

4, 2, 1, 3, 5 4, 1, 2, 3, 5 2, 4, 1, 3, 5 2, 4, 3, 5, 1

17. You are interviewing a suspect and want to be able to determine how the interviewee will behave when answering an unethical question. What type of questions should be included in your initial questions of the suspect?

Assessment questions Disarming questions Sensitive questions Calibration questions

18. When company management makes vendors and suppliers aware of company policies and procedures, what frequently occurs?

Vendor and supplier purchases increase Fraud risk is reduced Procurement fraud increases Vendor and supplier relationships deteriorate

19. Dan was the head teller of a large bank and, over a period of five years, he embezzled $400,000. He conducted his fraud scheme by looking for dormant accounts held by the bank, and manipulating the balances. As head teller, Dan was not only responsible for dormant accounts, but also resolved customer complaints. If a customer complained about an account, Dan would tell them it was a computer error. What type of internal control was missing from the bank?

Physical control Documentation Authorization Audit

20. Which behavioral symptom may fraud perpetrators display?

Extreme friendliness Workaholic Unusual calmness Fear