1Q: Financial misreporting or misappropriation of assets are the two types of fraud that typically occur within organizations - T/F

2Q: Which type of fraud is typically the most costly to business organizations? - Misappropriation of assets - Reducing the sales price of old inventory to get it sold - Financial misreporting - Not having enough Harry Potter T-shirts in inventory for the Holiday season

3Q: What are the three elements of the fraud triangle? - Motivation, envy, rationalization, opportunity - Jealousy, rationalization, opportunity - Rationalization, motivation, opportunity - Motivation, personal gain, rationalization

4Q: Based on the Fraud and Internal Controls video, what was the impact to Waste Managements financial statements when they extended the useful life of their long-term depreciable assets (waste trucks)? - The sales revenue increased by $1.7 billion - The earnings (net income) increased by $1.7 billion - There was no impact to the financial statements - The expenses increased by $1.7 billion

5Q: Based on the Fraud and Internal Controls video, what was the impact of Enrons financial misreporting? (Select ALL that apply) - Thousands of employees and investors lost everything in their retirement accounts - Many employees lost their jobs - Shareholders lost $74 billion - The company (Enron) prospered afterwards

6Q: Based on the Fraud and Internal Controls video, for both cases of massive fraud (Waste Management and Enron), if management had paid more attention to adequate internal controls, could these issues have been avoided? - Yes - No - I dont know

7Q: Which element of the fraud triangle does accounting internal control attempt to eliminate (See textbook)? 2 - Opportunity - Motivation - Rationalization - Need

8Q: Performance measurement systems are the formal process by which organizational or employee performance is measured against pre-established criteria as set out in budgets, plans, and goals. - T/F

9Q: Companies implement performance measures to accomplish which of the following items: - Give the accountants more work to do - Create incentives for employees to be less efficient - Direct (drive) employee actions and behavior - To help the community

10Q: Based on the Performance Measurement Video - Instructor tutorial, if a lemonade stand employee was personally paid an extra $0.05 for each cup as an incentive (on top of their normal $ compensation) they sold over 800 in a month, could this further drive their behavior? - Yes - No - I dont know

11Q: If the incentive in question # 10 was established for Lemonade Corp., which of the following internal controls would help reduce the chance of employee fraud or malfeasance? (Select ALL that apply) - Employee cannot take bathroom breaks without permission from the stand owner - Employee cannot lower the sales price of cup of lemonade to increase sales without permission from the stand owner - Employee cannot change the quality or quantity (cup size) of the lemonade sold without permission from the stand owner - Employee can only take one 15 minute break per work session

12Q: Which scenario below is an example(s) of a financial incentive provided to managers and linked to a performance measure? - If net income exceeds $100,000 for the accounting period, the manager receives 5% of the net income in excess of $100,000 - Manager receives an extra $1,000 in pay for the month if expenses are kept at or below the benchmark budget number of $50,000 - Manager receives a $100 bonus if they make 10 sales calls a day - All of the above

13Q: If the performance of Waste Managements executive team was measured using financial earnings and their bonuses were linked to this measure (i.e. higher earnings results in higher executive bonuses), do you think this was a contributing factor to the fraud that was committed? 3 - Yes - No - I dont know

14Q: McDonalds uses the following performance measures related to their drive thru: Average time to service a customer The accuracy of the order The customer experience. If McDonalds performs well on these performance measures, what would you expect to be the impact to their financial statements? (Select ALL that apply) - Increased sales revenue - Reduced or consistent level of expenses - Decreased sales revenue - Increased expenses

15Q: Based on question #14 above, if McDonalds does NOT perform well on these performance measures, what would you expect to be the impact to their financial statements? (Select ALL that apply) - Increased sales revenue - Reduced or consistent level of expenses - Decreased sales revenue - Increased expenses

16Q: Performance measurement systems are always good for companies and there are never any unintended bad consequences. - T/F