PLEASE VERIFY THAT THE HIGHLIGHTED ANSWERS ARE CORRECT.
1. Which of the following is an example of a whistle-blowing system? a. Bulletin board service b. Supervisor intervention c. Removing middle management layer d. Fraud reporting hotline 2. Research on honesty shows that individuals fall into three groups: (1) those who will almost always be honest, (2) those who are situationally honest, and (3) those who will always be dishonest. Which of these groups is (are) the biggest? a. Group 1(50%) b. Group 2 (40\%) c. Group 3 (45\%) d. Groups 1 and 3 ( 35% each) 3. The gathering of this type of evidence in a fraud investigation often involves forensic analysis by experts. a. Documentary evidence b. Testimonial evidence c. Physical evidence d. Personal observation 4. Segregation of duties, as a control procedure, is most often used: a. when the task involved is complex. b. when it is impossible for one person to complete a task. c. when appraisals are conducted. d. when cash is involved. 5 . The theory behind is that if people know their work or activities will be monitored by others, the opportunity to commit and conceal a fraud will be reduced. a. documentation b. segregation of duties c. system of authorizations d. independent checks 6. Which of the following is NOT an element of a good control environment? a. Trust b. Modeling c. Appropriate hiring d. Management's communication 7. Which of the following would NOT be acceptable as fraud-related experience to satisfy the education requirements to apply for CFE certification? a. Auditor (internal or external) b. Investigator for a law enforcement agency or in the private sector c. Experience in the Human Resources department of an organization d. Paralegal for a prosecuting attorney 8. Fraud in companies such as WorldCom, Enron, Waste Management, Sunbeam, Rite-Aid, Phar-Mor, and Parmalat are examples of: a. customer fraud. b. investment scams. c. vendor fraud. d. management fraud. 9. Fraud has a direct dollar-for-dollar impact on a company's: a. revenues. b. net income. c. profit margin. d. stock price. 10. What is a purpose of proactive fraud auditing? a. It creates an atmosphere of distrust between and among employees. b. Its purpose is to deter employees from committing fraud. c. It provides ways for employees to deal with personal pressures. d. It eliminates collusion as a means of committing fraud. 11. Once a fraud has occurred and a preventive solution developed, the solution should: a. not be implemented because of the reactive circumstance in which it was created. b. be implemented only after testing by external auditors. c. always be implemented by default. d. be implemented only if it meets the cost-effectiveness test. 12. In order to detect fraud at the earliest, a manager should pay attention to: a. present lifestyle. b. past conduct. c. attitude toward work. d. absenteeism. 13. All transactions related to specific accounts, such as cash or inventory, are summarized in the: a. journal. b. ledger. c. trial balance. d. balance sheet. 14. involves the actual taking of cash, inventory, information, or other assets, whereas involves selling stolen assets or transferring them into cash and then spending the cash. a. Conversion, coercion b. Theft, conversion c. Coercion, theft d. Theft, coercion 15. Which of the following statements regarding fraud symptoms is NOT accurate? a. With fraud, it is not usually obvious that a crime has been committed. b. To detect fraud, red flags must be investigated. c. Fraud symptoms provide conclusive proof of fraud. d. Many fraud symptoms go unnoticed
