1 One major difference between fraud and a mistake is: Concealment Cover-up The act Conversion (benefit to the perpetrator) Question 2 One way of demonstrating that an act was fraud and not a mistake is by: Demonstrating that the employee concealed the act. Showing that there were multiple incidents of the same act. The destruction of evidentiary documents that describe the act. All of the above. Question 3 Conversion can be shown to have occurred by: Tracing the money to the defendants care Tracing the money to the defendants department Tracing the money to the defendants bank account All of the above Question 4 Large fraud perpetrators are more likely to use the money for all of the following except: to purchase new homes. to pay for expensive vacations. to support extramarital affairs. to pay taxes. Question 5 Overall, management must design, implement, and maintain: an internal controls program to protect entity assets, liabilities, and owners equity. internal controls to support effective and efficiency of operations, reliability of reporting, and compliance with laws and regulations. an automated accounting system that implements each component of U.S. GAAP accounting principles. All of the choices are correct. Question 6 Albrecht developed the fraud scale, which includes the following components: situational pressures, perceived opportunity, and personal integrity. high personal debt, living beyond ones means, drug or alcohol problems. situational pressures, personal integrity, and criminal record. None of the above are the components for the fraud scale. Question 7 Which of the following is true concerning the fraud scale developed by Albrecht? Situational pressures are not important when integrity is examined in the fraud scale. The fraud diamond and its addition of capability, was based on criticism of both the fraud triangle and fraud scale. Personal integrity was added, and rationalization was deleted from the fraud triangle. None of the above are the components of the fraud scale. Question 8 Fraud deterrence begins: with the employers internal controls. in the employees mind. with the fraud examination. with regulatory and legal actions such as PCAOB Auditing Standard No. 5, AICPA Statement on Auditing Standards (SAS) No. 99, and the SarbanesOxley Act. Question 9 The triangle of fraud action does NOT include which of the following characteristics? The act The concealment The opportunity The conversion or benefit that accrues to the perpetrator Question 10 Intent is usually demonstrated by showing which of the following? The act The concealment The cover-up All of the above Question 11 Segregation of duties, the most common internal control, is best described as which type of control? preventative control. deterrence. detection control. opportunity control