17. Which of the following might be a warning sign of a shell company scheme?

MULTIPLE CHOICE

		a. Invoices lacking details of the items purchased.
		b. A vendor that is not listed in the phone book.
		c. An unexpected and significant increase in consulting expenses.
		d. All of the above.

18. Which of the following is not a red flag for a scheme involving fraudulent invoices from non-accomplice vendors?

MULTIPLE CHOICE

		a. Noting that paid was marked on every voucher that has been paid.
		b. Mailing addresses differing from the real vendor address.
		c. Deviations from the approved vendor list.
		d. An invoice number out of sequence.

19. For the small business, which of the following is a good way to prevent or detect fraud?

MULTIPLE CHOICE

		a. Segregate duties.
		b. Owner involvement in the business.
		c. CPA Audit.
		d. Hire trusted employees only.

20. Which of the following is not a way to detect personal purchases on company credit cards.

MULTIPLE CHOICE

		a. Verify the business purpose for each expense.
		b. Establish spending limits for each card holder.
		c. Require original support for each expense.
		d. Utilize credit cards from several different companies.

21. Which of the following is the most difficult fraud to detect?

MULTIPLE CHOICE

		a. Cash skimming
		b. Cash larceny.
		c. Shell company billing scheme.
		d. Use of company charge card for personal purchases.

22. Which of the following is not a control for preventing/detecting an employee from stealing from the bank deposit?

MULTIPLE CHOICE

		a. Separating of duties for taking deposits to the bank and reconciling the bank account.
		b. Examining the bank deposit slip for alterations.
		c. Maintaining more than one copy of the bank deposit slip that is matched to the bank's receipt of the deposit.
		d. Insuring that the same person who opens the mail and prepares the deposit also reconciles the bank account.

23. Shell Company invoices may be identified by all of the following except:

MULTIPLE CHOICE

		a. Lack of a telephone number on the invoice.
		b. Lack of a detailed description.
		c. Use of a residential address.
		d. Use of different colors for printing the invoice.

24. In reference to billing schemes which of the following is false?

MULTIPLE CHOICE

		a. Separation of duties should not be considered a control used to prevent billing scheme frauds.
		b. Prior approval for purchases made with a company credit card is normally not required.
		c. In a pass through scheme merchandise is resold to the victim company at ahigher price.
		d. Individuals who approve purchases are most likely to engage in a billing scheme.

25. In a small business environment which of the following functions most likely would be done by the company's outside certified public accountant?

MULTIPLE CHOICE

		a. Prepare the deposit.
		b. Prepare refund checks.
		c. Prepare disbursement checks.
		d. Maintain the general ledger.

e. Review the bookkeeping

26. Most lapping schemes are detected:

MULTIPLE CHOICE

		a. By employee tips.
		b. By audits.
		c. Because they collapse under their own weight because of the complexity and volume of transactions.
		d. Because they involve collusion between two employees.

27. Which of the following is not a component of the fraud triangle?

MULTIPLE CHOICE

		a. Motive
		b. Opportunity
		c. Employee
		d. Rationalization

28. Which of the following statements is true?

MULTIPLE CHOICE

		a. Studies show that frauds perpetrated by males average a larger dollar amount than those perpetrated by females.
		b. Studies show that frauds perpetrated by females average a larger dollar amount than those perpetrated by males.
		c. Studies show that frauds perpetrated by males and females average basically the same dollar amount.

29. Which of the following statements is true?

MULTIPLE CHOICE

		a. The average amount for a fraud in a large business is more than the average amount in a small business.
		b. The average amount for a fraud in a small business is more than the average amount in a large business.
		c. The average amount for a fraud in a small business and a large business is basically the same.

30. Most frauds utilizing lapping of accounts receivable occur because:

MULTIPLE CHOICE

		a. The same person collects the cash and reconciles the bank account.
		b. The same person collects the cash and records the accounts receivable.
		c. The same person collects the cash and controls the inventory.
		d. The same person collects the cash and records entries in the general ledger.

31. Which of the following is not part of the COSO definition of internal control?

MULTIPLE CHOICE

		a. Reliability of financial reporting.
		b. Effectiveness and efficiency of operations.
		c. Ability to make a profit.
		d. Compliance with applicable laws and regulations.

32. Increasing the perception of frauds being detected does not provide a significant deterrent to employee theft.

MULTIPLE CHOICE

True or false?