QUESTION 2

Which of the following would you look for if you suspected a kickback scheme?

		Lower costs of materials than normal.
		Goods ordered from a variety of vendors.
		Established bidding policies not being followed.
		Products meeting quality control standards.

2 points

QUESTION 3

Most whistleblowers are fired.

True

False

2 points

QUESTION 4

The most common way of creating financial statement fraud is:

		Overstating capital assets such as land, building and equipment
		Understating liabilities
		Fictitious revenue recognition
		Understating cost of goods sold

2 points

QUESTION 5

Which of the following is not an indication of a bid rigging scheme?

		Tailoring specifications of a contract to fit the capabilities of a single contractor.
		Providing information to certain vendors on how to prepare their bid.
		Not extending the bid opening date.
		Soliciting bids from fictitious suppliers.

2 points

QUESTION 6

True or false? Most kickback schemes end up with the company being over billed even though they dont start off that way.

True

False

2 points

QUESTION 7

The Worldcom fraud was discovered because of tips to the internal auditors.

True

False

2 points

QUESTION 8

Who is generally responsible for the financial statements?

		Management.
		The external certified public accountant.
		The applicable federal government agency.
		The applicable state society of certified public accountants.

2 points

QUESTION 9

Which of the following would not be considered a red flag for a kickback scheme?

		Expenditures come in just under the review limit.
		The purchasing agent has personal financial problems.
		The purchasing agent is so dedicated that he never takes any time off.
		Prices paid for goods purchased are lower than the market average.

2 points

QUESTION 10

True of false? A financial statement fraud is the deliberate misstatement or omission of amounts or disclosures in the financial statements to deceive financial statement users.

True

False

2 points

QUESTION 11

Reference the www.cfenet.com article Ghost Goods: How to Spot Phantom Inventory the auditors might have been able to spot the fraud if they asked the question:

		Why are the executives being paid so much?
		Why are so many goods stored in an off site warehouse.
		How can a company make money by selling goods below cost?
		How can a company make a profit with high acquisition costs?

2 points

QUESTION 12

True of false? Preparing financial statements that are know to be materially misstated is not considered financial statement fraud.

True

False

2 points

QUESTION 13

Based on the Business Week article When Customers Want Kickbacks which of the following is false?

		Once you give in to a request for graft from one person, word will get around.
		One option you can use if approached to receive a kickback is to ignore the request.
		You should never give a firm no answer to a bribe as you want to do business with the customer in the future.
		Bribes are illegal and unethical.

2 points

QUESTION 14

True of false? Bribery, economic extortion, and conflict of interest each involve the exertion of the influence of an official or employee that has a detrimental effect on his constituency or company.

True

False