II. Research in Occupetional Fraud and Abuse 54. Which of the following represents one of the legs of the Fraud Triangle? A. Immediate financial resources B. Acquiescence C. Peroeived opportunity D. Conjuncture of circumstances 55. Through his research, Donald Cressey found that the non-shareable problems encountered by the embezzlers he interviewed arose from situations that could be divided into six basic categories. Which of the following is NOT one of the categories? A. Violation of ascribed obligations B. Problems resulting from personal falure C. A desire for revenge D. Status gaining 56. Dr. Steve Albrecht's study, which focused on a set of fitty possible red flags of occupational fraud and abuse, revealed which of the following trends about the fraudsters he researched? A. Perpetrators who believed their compensation was inadequate committed primarily large frauds. B. College graduates who committed fraud were more likely to spend the proceeds of their frauds on extramarital relationships than fraudsters without college degrees. C. Lack of segregation of duties was a weakness found in the circumstanoes associated with smaller frauds. D. Perpetrators who were interested in "beating the system" committed larger frauds. 57. Which of the following circumstances would be covered by the pressure leg of Cressey's Fraud Triangle? A. A bookkeeper who is $20,000 in debt due to liegal betting B. An executive with $100,000 of uncovered medical costs from a serious ilness C. A salesman with large debts due to a gambing addiction D. All of the above III. Who Commits Fraud? 58. According to the 2020 Report to the Nations, approximately what percentage of the perpetrators in the study had been previously convicted of a fraud-related offense? A. 4% B. 13% C. 51% D. 89% 59. Based on the data in the 2020 Report to the Nations, which of the following scenarios contains the most common behavioral red flag of fraud? A. The accounts payable clerk drives to work in a new Mercedes-Berz SClass sedan while flashing his new Rolex watch. B. The intemal audit director is going through a divoroe. C. The information technology (IT) manager is a workaholic and never takes a vacation. D. A paralegal has a shopping addiction. 60. An example of an extemal perpetrator of fraud against an organization is: A. The organization's CEO B. The organization's controller C. A third-party vendor of the organization D. The organization's human resources (HR) manager 61. According to the 2020 Report to the Nations, employees in which of the following departments are more prone to committing fraud? A. Internal audit B. Customer service C. Research and development D. Operations 62. According to the article "Why Do CFOs Become Involved in Material Accounting Manipulations?" the most common reason a chief financial officer (CFO) commits financial statement fraud is: A. To cover up an embezzlement B. Pressure from CEOs C. To get revenge against the board of directors D. To protect their personal assets 72. When an honest person is accused of something they did not do, that person is thely to become more in making denials. A. Weak B. Forceful C. Calm D. Impressive 73. Which of the following is the most accurate statement about the behavior of dishonest people during interviews? A. Dishonest people typically have intolerant attitudes toward criminal conduct. B. Dishonest people frequently use oaths to add credbility to their lies. C. Dishonest people will generally be less reluctant than honest ones to terminate the interview. D. Dishonest people are more Ikely than honest people to deriy an event directly. V. Fraud Prevention 74. In general, what is the primary objective of a fraud risk assessment? A. To provide an estimate of an organization's fraud losses B. To help an organization's leadership identify what makes it most vulnerable to fraud C. To establish the guil or innocence of an employee suspected of committing fraud D. To assess the design and effectiveness of an organization's internal controls over financial reporting 75. Which of the following is the most appropriate method for preventing fraud? A. Peducing the perception of detection B. Establishing and adhering to a system of disciplinary actions for rule breakers C. Discouraging employees from reporting about their fraud-related concerns D. Threatering employees' jobs N. Why Did They Do It? 63. Which of the following is a common motivating factor for fraud? A. Sense of entitlement B. Financial need C. Greed D. Al of the abov 64. Which of the following is a trait commonly found in psychopaths? A. Deep emotions B. A strong sense of empathy C. A lack of remorse for wrongdoing D. Stabilty 65. People with experience abnormaly elevated emotional states for periods in a way that interferes with functioning. A. Antisocial personality disorders B. Bipolar disorders (manic depression) C. Borderine personality disorders D. Narcissism 66. Roger is convinced of his great, inevitable personal destiny, but he is unsatisfied with his current accomplishments, standing, wealth, and influence. To uphold and maintain his extreme view of self-importanoe and attain what he feels he deserves, Roger resorts to fraud. Which of the following personality disorders does Roger most likely possess? A. Psychopathy B. Antisocial personality disorder C. Narcissism D. Bipolar disorders (manic depression) 67. "Having or showing a selfish desire for wealth and possessions" is the definition of: A. Narcissism B. Manic depression C. Greed D. Entitlement 68. Which of the following is the most accurate statement about common motivating factors for fraud? A. Frequently, when greed compels an individual to commit fraud, the greed stems from insecurity. B. People with strong egos are less likely to engage in fraudulent behavior than those with weak egos. C. Most experts hypothesize that fraud incidents increase during times of economic growth. D. Typically, when anger compels an individual to commit fraud, the anger stems from ego. V. Considering the Fraudster's Mindset 69. refers to actions designed to mislead someone into believing an inaccuracy or untruth. A. Prevarication B. Equivocation C. Deoeption D. Defection 70. Which of the following is a common reason why people lie? A. To maintain a secret B. To protect another person's feelings C. To avoid punishment D. All of the above 71. Which of the following are manipulators an interviewer might see displayed by a nervous subject during an interview? A. Playing with jewery B. Picking Int from clothing C. Holding one's hands while talking D. All of the above Vill. Discharging Employees 45. Which of the following statements is true? A. Term employees operate under the at-will doctrine. B. Employment contracts can be formed by the language in an employee handbook. C. There is no such thing as an implied contract. D. All employment contracts must be set forth in witing. 46. Which of the following can limit a company's ability to discipline or fire an employee? I. The terms of a collective bargaining agreement II. An informal promise to the employee of continued employment as long as they "do a good job" III. A description of the compary's disciplinary procedures contained in an employee handbook A. I B. I and II C. I and III D. I, II, and III 47. An employment contract in which the terms of employment are set forth in writing and the document is signed by each party is known as an: A. Express contract B. Implied contract C. Informal contract D. At-will contract 48. According to the Fraud Examiners Manual, which of the following is NOT true of statutory criminal restitutions? A. These orders only apply while the defendant is on probation. B. These orders are in addition to any other penalties provided by law for the defendant's crimes. C. These orders direct the retum of the victim's property or its monetary equivalent if the property cannot be retumed. D. These orders typically do not apply to a loss for which the victim has received, or will receive, compensation from another source. B. WHY PEOPLE COMMIT FRAUD I. Understanding Human Behvior 49. Which of the following is the most accurate description of the instrumental perspective on legal complance? A. People obey the law because they fear punishment. B. People obey the law because of personal morality. C. People obey the law because they believe it results in a peaceful society. D. People obey the law because they cannot evade it. 50. The social process theory positing that criminal behavior is leamed through interactions with other people is called: A. Integrated theory B. Theory of differential association C. Differential reinforoment theory D. Theory of anomie 51. What is the value in understanding the way a typical fraudster thinks? A. It can be used to develop a strong fraud prevention program. B. It can provide valuable insight to enhance an organization's anti-fraud efforts. C. It can give fraud examiners an edge in gaining an admission during an interview. D. All of the above statements are true. 52. refers to the belief that one ought to obey the law. A. Compliance B. Legitimacy C. The normative perspective D. Behaviorism 53. Which of the following theories of crime causation maintains that individuals wil do what is best for the greater good - not only for themselves, but also for society as a whole? A. Utiltarianim B. Free will criminology C. Classical criminology D. Differential reinforcement theory 36. The Fifth Amendment's protections apply to: A. Civil offenses B. Criminal offenses C. Internal offenses D. External offenses 37. For a plaintiff to recover civil damages for intentional infliction of emotional distress, the plaintiff must prove all of the following elements EXCEPT: A. The defendant's conduct was extreme and outrageous. B. The defendant acted with the intent of causing severe emotional distress or with reckless disregard of whether their actions would cause severe emotional distress. C. The plaintiff suffered severe distress. D. The plaintiff's reputation was damaged. 38. The attomey-client privilege can be applied to all the following EXCEPT: A. Consulting experts B. Testifying experts C. Investigators working under the attomey's supervision D. Paralegals working under the attorney's supervision 39. According to the Fraud Examiners Manual, which of the following is true of the attomey work-product doctrine? A. Only protects materials that are prepared in anticipation of litigation B. Only protects the confidentiality of documents that are prepared by an attomey C. Only protects exhibits, documentary evidence, and witnesses' statements D. Only protects witten communications VI. Writing Reports 40. What information should be included in an investigation report? A. Al relevant facts B. Only those facts that support the fraud theory C. Only those facts that show culpability D. Only those facts that are not confidential 41. Green, an intemal investigator, has prepared a report for his supervisor. The report summarizes the results of an intemal investigation Green conducted. The report contains several facts that are harmful to the reputation of Blue, an employee. Some of the facts turn out to be false. Blue sues the compary for libel. To successfully defend itself, the company must prove which of the following? I. The report was made in good faith. II. Green had a legitimate interest in the subject of the report. II. Green was working under the direct supervision of an attorney. N. The report was only communicated to individuals with legtimate interests in the subject of the report. A. I B. I and V C. I and III D. I, II, and N 42. A good written report should only convey: A. Subjective facts B. Objective facts C. Editorial judgments D. Both subjective and objective facts 43. According to the Fraud Examiners Manual, an attomey's intemal report to controlling management is probably NOT protected by the attomey-client. privilege if a court finds that: A. The attorney acted as an irmestigator, and the report's purpose was therefore to analyze and advise the company about factual circumstances. B. The report's purpose was to provide legal advice. C. The report was not disclosed to outside parties. D. The report was prepared in anticipation of litigation. 44. All of the following are characteristics of a good report EXCEPT: A. Accuracy B. Clarity C. Partiality D. Timeliness II. Research in Occupetional Fraud and Abuse 54. Which of the following represents one of the legs of the Fraud Triangle? A. Immediate financial resources B. Acquiescence C. Peroeived opportunity D. Conjuncture of circumstances 55. Through his research, Donald Cressey found that the non-shareable problems encountered by the embezzlers he interviewed arose from situations that could be divided into six basic categories. Which of the following is NOT one of the categories? A. Violation of ascribed obligations B. Problems resulting from personal falure C. A desire for revenge D. Status gaining 56. Dr. Steve Albrecht's study, which focused on a set of fitty possible red flags of occupational fraud and abuse, revealed which of the following trends about the fraudsters he researched? A. Perpetrators who believed their compensation was inadequate committed primarily large frauds. B. College graduates who committed fraud were more likely to spend the proceeds of their frauds on extramarital relationships than fraudsters without college degrees. C. Lack of segregation of duties was a weakness found in the circumstanoes associated with smaller frauds. D. Perpetrators who were interested in "beating the system" committed larger frauds. 57. Which of the following circumstances would be covered by the pressure leg of Cressey's Fraud Triangle? A. A bookkeeper who is $20,000 in debt due to liegal betting B. An executive with $100,000 of uncovered medical costs from a serious ilness C. A salesman with large debts due to a gambing addiction D. All of the above III. Who Commits Fraud? 58. According to the 2020 Report to the Nations, approximately what percentage of the perpetrators in the study had been previously convicted of a fraud-related offense? A. 4% B. 13% C. 51% D. 89% 59. Based on the data in the 2020 Report to the Nations, which of the following scenarios contains the most common behavioral red flag of fraud? A. The accounts payable clerk drives to work in a new Mercedes-Berz SClass sedan while flashing his new Rolex watch. B. The intemal audit director is going through a divoroe. C. The information technology (IT) manager is a workaholic and never takes a vacation. D. A paralegal has a shopping addiction. 60. An example of an extemal perpetrator of fraud against an organization is: A. The organization's CEO B. The organization's controller C. A third-party vendor of the organization D. The organization's human resources (HR) manager 61. According to the 2020 Report to the Nations, employees in which of the following departments are more prone to committing fraud? A. Internal audit B. Customer service C. Research and development D. Operations 62. According to the article "Why Do CFOs Become Involved in Material Accounting Manipulations?" the most common reason a chief financial officer (CFO) commits financial statement fraud is: A. To cover up an embezzlement B. Pressure from CEOs C. To get revenge against the board of directors D. To protect their personal assets 72. When an honest person is accused of something they did not do, that person is thely to become more in making denials. A. Weak B. Forceful C. Calm D. Impressive 73. Which of the following is the most accurate statement about the behavior of dishonest people during interviews? A. Dishonest people typically have intolerant attitudes toward criminal conduct. B. Dishonest people frequently use oaths to add credbility to their lies. C. Dishonest people will generally be less reluctant than honest ones to terminate the interview. D. Dishonest people are more Ikely than honest people to deriy an event directly. V. Fraud Prevention 74. In general, what is the primary objective of a fraud risk assessment? A. To provide an estimate of an organization's fraud losses B. To help an organization's leadership identify what makes it most vulnerable to fraud C. To establish the guil or innocence of an employee suspected of committing fraud D. To assess the design and effectiveness of an organization's internal controls over financial reporting 75. Which of the following is the most appropriate method for preventing fraud? A. Peducing the perception of detection B. Establishing and adhering to a system of disciplinary actions for rule breakers C. Discouraging employees from reporting about their fraud-related concerns D. Threatering employees' jobs N. Why Did They Do It? 63. Which of the following is a common motivating factor for fraud? A. Sense of entitlement B. Financial need C. Greed D. Al of the abov 64. Which of the following is a trait commonly found in psychopaths? A. Deep emotions B. A strong sense of empathy C. A lack of remorse for wrongdoing D. Stabilty 65. People with experience abnormaly elevated emotional states for periods in a way that interferes with functioning. A. Antisocial personality disorders B. Bipolar disorders (manic depression) C. Borderine personality disorders D. Narcissism 66. Roger is convinced of his great, inevitable personal destiny, but he is unsatisfied with his current accomplishments, standing, wealth, and influence. To uphold and maintain his extreme view of self-importanoe and attain what he feels he deserves, Roger resorts to fraud. Which of the following personality disorders does Roger most likely possess? A. Psychopathy B. Antisocial personality disorder C. Narcissism D. Bipolar disorders (manic depression) 67. "Having or showing a selfish desire for wealth and possessions" is the definition of: A. Narcissism B. Manic depression C. Greed D. Entitlement 68. Which of the following is the most accurate statement about common motivating factors for fraud? A. Frequently, when greed compels an individual to commit fraud, the greed stems from insecurity. B. People with strong egos are less likely to engage in fraudulent behavior than those with weak egos. C. Most experts hypothesize that fraud incidents increase during times of economic growth. D. Typically, when anger compels an individual to commit fraud, the anger stems from ego. V. Considering the Fraudster's Mindset 69. refers to actions designed to mislead someone into believing an inaccuracy or untruth. A. Prevarication B. Equivocation C. Deoeption D. Defection 70. Which of the following is a common reason why people lie? A. To maintain a secret B. To protect another person's feelings C. To avoid punishment D. All of the above 71. Which of the following are manipulators an interviewer might see displayed by a nervous subject during an interview? A. Playing with jewery B. Picking Int from clothing C. Holding one's hands while talking D. All of the above Vill. Discharging Employees 45. Which of the following statements is true? A. Term employees operate under the at-will doctrine. B. Employment contracts can be formed by the language in an employee handbook. C. There is no such thing as an implied contract. D. All employment contracts must be set forth in witing. 46. Which of the following can limit a company's ability to discipline or fire an employee? I. The terms of a collective bargaining agreement II. An informal promise to the employee of continued employment as long as they "do a good job" III. A description of the compary's disciplinary procedures contained in an employee handbook A. I B. I and II C. I and III D. I, II, and III 47. An employment contract in which the terms of employment are set forth in writing and the document is signed by each party is known as an: A. Express contract B. Implied contract C. Informal contract D. At-will contract 48. According to the Fraud Examiners Manual, which of the following is NOT true of statutory criminal restitutions? A. These orders only apply while the defendant is on probation. B. These orders are in addition to any other penalties provided by law for the defendant's crimes. C. These orders direct the retum of the victim's property or its monetary equivalent if the property cannot be retumed. D. These orders typically do not apply to a loss for which the victim has received, or will receive, compensation from another source. B. WHY PEOPLE COMMIT FRAUD I. Understanding Human Behvior 49. Which of the following is the most accurate description of the instrumental perspective on legal complance? A. People obey the law because they fear punishment. B. People obey the law because of personal morality. C. People obey the law because they believe it results in a peaceful society. D. People obey the law because they cannot evade it. 50. The social process theory positing that criminal behavior is leamed through interactions with other people is called: A. Integrated theory B. Theory of differential association C. Differential reinforoment theory D. Theory of anomie 51. What is the value in understanding the way a typical fraudster thinks? A. It can be used to develop a strong fraud prevention program. B. It can provide valuable insight to enhance an organization's anti-fraud efforts. C. It can give fraud examiners an edge in gaining an admission during an interview. D. All of the above statements are true. 52. refers to the belief that one ought to obey the law. A. Compliance B. Legitimacy C. The normative perspective D. Behaviorism 53. Which of the following theories of crime causation maintains that individuals wil do what is best for the greater good - not only for themselves, but also for society as a whole? A. Utiltarianim B. Free will criminology C. Classical criminology D. Differential reinforcement theory 36. The Fifth Amendment's protections apply to: A. Civil offenses B. Criminal offenses C. Internal offenses D. External offenses 37. For a plaintiff to recover civil damages for intentional infliction of emotional distress, the plaintiff must prove all of the following elements EXCEPT: A. The defendant's conduct was extreme and outrageous. B. The defendant acted with the intent of causing severe emotional distress or with reckless disregard of whether their actions would cause severe emotional distress. C. The plaintiff suffered severe distress. D. The plaintiff's reputation was damaged. 38. The attomey-client privilege can be applied to all the following EXCEPT: A. Consulting experts B. Testifying experts C. Investigators working under the attomey's supervision D. Paralegals working under the attorney's supervision 39. According to the Fraud Examiners Manual, which of the following is true of the attomey work-product doctrine? A. Only protects materials that are prepared in anticipation of litigation B. Only protects the confidentiality of documents that are prepared by an attomey C. Only protects exhibits, documentary evidence, and witnesses' statements D. Only protects witten communications VI. Writing Reports 40. What information should be included in an investigation report? A. Al relevant facts B. Only those facts that support the fraud theory C. Only those facts that show culpability D. Only those facts that are not confidential 41. Green, an intemal investigator, has prepared a report for his supervisor. The report summarizes the results of an intemal investigation Green conducted. The report contains several facts that are harmful to the reputation of Blue, an employee. Some of the facts turn out to be false. Blue sues the compary for libel. To successfully defend itself, the company must prove which of the following? I. The report was made in good faith. II. Green had a legitimate interest in the subject of the report. II. Green was working under the direct supervision of an attorney. N. The report was only communicated to individuals with legtimate interests in the subject of the report. A. I B. I and V C. I and III D. I, II, and N 42. A good written report should only convey: A. Subjective facts B. Objective facts C. Editorial judgments D. Both subjective and objective facts 43. According to the Fraud Examiners Manual, an attomey's intemal report to controlling management is probably NOT protected by the attomey-client. privilege if a court finds that: A. The attorney acted as an irmestigator, and the report's purpose was therefore to analyze and advise the company about factual circumstances. B. The report's purpose was to provide legal advice. C. The report was not disclosed to outside parties. D. The report was prepared in anticipation of litigation. 44. All of the following are characteristics of a good report EXCEPT: A. Accuracy B. Clarity C. Partiality D. Timeliness