1. Data such as laundromat electricity usage and cycle time, beer purchase quantities, and travel dates are examples of:
3. Tend to be "corrupted" sources of data
5. Red flags that have little to no potential value in verifying or disproving fraud
7. Nonfinancial numerical performance data
9. Accounting anomalies

6 points

QUESTION 2

1. In an electronic environment that captures a huge amount of transactions annually, many transactions and data relationship anomalies appear to be a potential fraud or error. To utilize the computer environment effectively, _________________ must be completed.
3. The targeted fraud risk assessment process
5. CAATT training by the auditor or examiner
7. A hypothesis/null hypothesis matrix
9. A Benford analysis on all journal entries

6 points

QUESTION 3

1. ____________ are part of the day-to-day operations of most organizations and are often observed by auditors.
3. Earnings management
5. Transaction adjustments
7. Risks
9. Anomalies

6 points

QUESTION 4

1. In most cases, asset misappropriation, corruption, and financial statement fraud last about ____________ from inception to conclusion.
3. 24 months
5. 2.4 months
7. 6 months
9. 16 months

6 points

QUESTION 5

1. __________________ is an attempt to identify the fraud as early as possible, in contrast to the optimal situation in which the fraud is prevented or deterred.
3. Implementing internal controls that prevent collusion
5. Conducting an annual fraud risk assessment
7. Separation of duties
9. Effective fraud detection

6 points

QUESTION 6

1. Who takes the lead in establishing, implementing, and maintaining a formal fraud risk management program?
3. Board and management
5. Regulatory agencies such as the PCAOB and SEC
7. Corporate shareholders
9. Internal auditors

6 points

QUESTION 7

1. The targeted fraud risk assessment approach assumes that there should be a direct relationship between the ________________ and the _________________________.
3. specific industry involved; risk levels typically associated with that industry
5. Level of risk associated with a material weakness in the company's controls; amount of attention devoted to that area during an audit
7. Organization's tolerance for risk; implementation of appropriate internal controls
9. Accounts receivable department; accounts payable department

6 points

QUESTION 8

1. Generally, three procedures are effective in identifying breakdowns in internal controls due to override and collusion: journal entries recording in the books and records, as well as other adjustments to financial information should be examined for proper back-up document; significant accounting estimates needs to be reviewed; and___________________________.
3. Unusual "one-time" transactions should be scrutinized to ensure they have an appropriate underlying business rationale
5. A properly functioning board-operated audit committee that has the ability to investigate anomalies independently should be established
7. A robust whistleblower mechanism should be implemented, and its existence widely published throughout the organization
9. Care should be taken by the board to ensure that the external auditor is indeed independent, in fact, and appearance

6 points

QUESTION 9

1. An overview of the fraud risk assessment process includes the following components:
3. Money, Ideology, Coercion, and/or Ego/Entitlement (MICE)
5. Act, concealment, and conversion
7. Propose the scope of the audit, execute the scope, report the findings to the board, and reply to management concerns
9. Evaluate the fraud risk factors, identify possible fraud schemes and scenarios, prioritize individual fraud risks, evaluate mitigating controls

6 points

QUESTION 10

1. Most red flags are
3. Not indicators of fraud but are a function of the dynamic environment in which organizations operate
5. Indicators of unskilled fraudsters who don't have sufficient knowledge to conceal their defalcations
7. Indicators of fraud if one knows how and where to look
9. Typically, indicative of fraud if a targeted risk assessment was not completed

6 points

QUESTION 11

1. The 2016 ACFE Report to the Nations found that ___________ of existing controls is the second most frequently observed internal control weakness that contributed to fraud; the lack of internal controls was the only weakness more frequently cited by the ACFE's survey respondents.
3. Override
5. A lack of clarity
7. Overly complex design
9. A lack of awareness

6 points

QUESTION 12

1. The most challenging issue regarding fraud detection in a digital environment is the potential for:
3. Hackers and other unauthorized users were gaining access to proprietary information
5. Historical transaction data to be lost over time due to the high costs of digital storage
7. An over-whelming number of fraud symptoms (i.e., red flags)
9. The inherent susceptibility of digitally stored data to be fraudulently altered without detection

6 points

QUESTION 13

1. ______________ is defined as an act where the computer hardware, software, or data is altered, destroyed, manipulated, or compromised due to acts that are not committed with the intent to execute financial fraud
3. Hacking
5. Distributed Denial of Service (DDoS)
7. Phishing
9. Computer crime

6 points

QUESTION 14

1. Damaged equipment, restoration of data or programs, lost sales, lost productivity, and harm to reputation or goodwill are examples cited by the text of economic losses associated with:
3. Computer fraud
5. Computer risks
7. Computer compromises
9. Computer crimes

6 points

QUESTION 15

1. Several attributes of the Internet make it an attractive operational location for criminal enterprises. First, individuals and businesses have come to realize that information is power. Criminals have determined they can profit by stealing and selling information. Second, cyberspace gives the criminal a worldwide reach. Third, The World Wide Web is relatively anonymous. Fourth:
3. Cybercriminals frequently use blockchain technology (i.e., distributed ledgers) to conceal their cybercrime
5. The majority of cybercrime originates from offshore havens such as Nevis and St. Kitts where local laws allow criminals to flourish
7. The Dark Web makes it impossible to track, identify, capture, and prosecute cybercriminals
9. The Dark Web makes it impossible to track, identify, capture, and prosecute cybercriminals