1.What category of the fraud triangle is offset by instituting independent reconciliations on certain accounts?

A. Reconciliations and reviews can help reduce the opportunity risk associated with the fraud triangle by instituting a third-party check on employee work.

B. Reconciliations are only performed after the work itself is done, so the value added to the management accounting process is minimal at best.

C. Since both the employee who is preparing the initial work file and the employee conducting the review are both on the payroll of the organization, this reconciliation is not independent and would not add value to the process.

D. Since an organization can, relatively easily, automate the review and journal posting process, there is not a need for individuals to conduct manual reviews of information.

2. If an accountant is concerned about the ethical implications of certain activities being undertaken by employees they are supervising, specifically the sharing of passwords, what is the most appropriate way to address these concerns? *

A. Since most large organizations contain a dedicated internal audit department and functional group anyway, it is not the responsibility of management accountants to worry about internal control issues.

B. To address any technology-related control issues, the most appropriate way to proceed would be to implement increased analytical tools to help track employee behavior.

C. Management has no tangible way to help ensure that password policies have been put into place and have been enforced, so it is not worth investing time and financial resources on these areas.

D. The most appropriate way to manage information technology risks, especially those related to password policies and procedures, is to train, educate, and implement policies to help ensure employees are aware of the potential pitfalls of sharing passwords with other people.

3. If an accounting professional is working for an organization that is reviewing an unethical transaction (including fraudulent financial reporting), what is an appropriate course of action?

A. Following the discovery of an incorrect or unethical accounting entry, the accounting professional involved should consult applicable guidance and information to resolve and address this issue.

B. Since the journal entries and financial statements have already been entered into the official record, there is nothing else to be done at this point.

C. After the entry of the incorrect journal entries, the accounting employee should manually reverse these entries and amounts.

D. When a potentially fraudulent report has been filed, the accounting professional should immediately bring these concerns to the board of directors

4. Which of the examples below provides the most accurate and relevant example of how a management accountant could successfully use artificial intelligence tools to reduce the risk of errors and omissions in the financial reporting process?

A. The best area to focus technology on to improve the financial reporting process is to focus on coordinating with external auditors to uncover existing errors.

B. Errors and omissions will inevitably happen in any reporting and accounting processes, so it will not make any difference what technology is included in the process.

C. One tactic that management accountants could employ to reduce the number of errors and omissions would be to focus on integrating increased review processes, by leveraging technology to prevent errors from occurring.

D. Since technology implementation always results in improvements and efficiencies, any steps taken by the management accountant will result in benefits.

5. Using the framework of the fraud triangle, which portion of the triangle is most applicable to the lack of cross-training opportunities within an organization?

A. A lack of cross-training can result in the same employees performing the same tasks consistently, opening opportunities for fraudulent behavior over time.

B. Not having cross-training opportunities at an organization does not have anything to do with ethics, ethical training, or employee training.

C. With technology, and the ability to track the activities of employees in real time, cross-training and job rotation has been rendered redundant.

D. Mandatory job training should be part of every employee's education and training, regardless of areas of responsibility.

6. Assuming a deliberate effort has been made to misrepresent the performance of an organization to external users of organizational information, what option below is the best step that an organization can take to prevent this issue from occurring again?

A. Since the incident was only relevant for data reported to external users, and policies can only influence internal information, no specific changes are required.

B. The implementation of an ethics hotline and online ethics portal will help improve the culture of the firm, and prevent the reporting of fraudulent information moving forward.

C. Building in reviews and verification processes into the reporting process, including an independent check by an unrelated department, will help reduce the likelihood of fraudulent reporting moving forward.

D. Designating a chief ethics officer who oversees regulatory issues will guarantee a reduction in unethical and illegal activity.

7. What fraud triangle component is offset by segregation of duties?

A. The fraud triangle, being a theoretical framework, is not directly tied to any management actions or activities, so there is no connection between these sets of activities.

B. Since the action of segregating different duties and responsibilities is associated with employees at organizations, the most logical place that have an impact in the fraud triangle is with rationalization.

C. Segregation of duties as an internal control policy and procedure is most helpful when reducing the fraud risk associated with opportunity, since no one employee has total control over a process.

D. Segregating out different job duties and responsibilities is becoming less important as time passes, especially since technology t

8. How can an accountant use the Fraud Triangle to identify and manage the risk of fraud?

A. The Fraud Triangle provides a model for explaining the pressures, rationalizations, and opportunities that influence people to commit fraud.

B. The Fraud Triangle provides a SOX-compliant model for examining the company's internal control environment in terms of its risk of fraud.

C. The Fraud Triangle provides a model for explaining the motives, means, and opportunities that influence people to commit fraud.

D. The Fraud Triangle provides a model for explaining how persuasion, coercion, and conviction influence people to commit fraud.

9. The senior management team at an organization, responding to changes in the competitive landscape, has chosen to completely revamp the internal processes and controls of an organization. This includes reorganizing the procurement and accounts payable processes at the organization to improve efficiency. What is one aspect of the fraud triangle that might cause unethical behavior in this situation?

A. The most clear-cut connection between these changes and the fraud triangle relates to the pressure aspect since employees might feel undue pressure to emphasize the positive results of these projects at the expenses of objectivity.

B. Based on the facts outlined in the above scenario, the most obvious fraud pressure point is opportunity, as increased efficiency always results in less supervision of transactions.

C. These changes are not associated with accounting or financial reporting activities underway at the organization, so there is no direct connection between these actions and the fraud triangle.

D. The most obvious pressure point in the fraud triangle is rationalization of existing unethical behavior facilitated by increased speed of transactional processing.