Question 30

1. An unexplained increase in uncollectible accounts receivable may be a warning sign of a non-cash asset misappropriation scheme involving false shipments of inventory.

   		True
   		False

2.5 points

Question 31

1. Running a computer program that identifies shipping documents with no associated sales order can detect which of the following non-asset cash misappropriation schemes?

   		False shipments.
   		Purchasing and receiving schemes.
   		Unconcealed inventory larceny.
   		Asset requisition schemes.

2.5 points

Question 32

1. Which of the following is not a method used to conceal false shipments of inventory?

   		Creating false sales orders.
   		Placing a false outstanding check on the bank reconciliation.
   		Writing off the inventory as scrap.
   		Physical padding (such as adding empty boxes to the inventory and counting them as full).

2.5 points

Question 33

1. From the article Control of Cash Register Thievery which of the following is not a red flag for a cash register disbursement scheme?

   		Low inventory shrinkage.
   		Altered cash register tapes.
   		Multiple refunds just under the review limit.
   		Increased refund transactions by the same employee.

2.5 points

Question 34

1. From the article So That's Why It's Called a Pyramid Scheme which of the following is false?

   		Assign experienced auditors for inventory observations.
   		Understand the relationship between the client and its principal suppliers.
   		It is more difficult to conspire with a family member than with an outsider.
   		Consider the increased risk with closely held businesses.

2.5 points

Question 35

1. From the article And Nothing But the Truth which of the following is true?

   		Most fraudulent disclosures involve purposeful omissions.
   		Management fraud is rarely detected through tips and complaints.
   		Material accounting changes need not be disclosed.
   		Management fraud for small amounts is not considered significant.

2.5 points

Question 36

1. From the article Ghost Goods: How to Spot Phantom Inventory to spot the possibility of phantom inventory, when analyzing a company's financial statements, the auditor should look for all of the following trends except:

   		Falling cost of sales as a percentage of sales.
   		Decreasing inventory turnover.
   		Cost of goods sold on the books agreeing to the tax return.
   		Inventory increasing faster than sales.

2.5 points

Question 37

1. From the article Let Them Know Someone's Watching which of the following is true?

   		From the boardroom to the mailroom all fraudsters think alike.
   		The auditor should not inquire as to the existence of fraud within the organization.
   		The auditor should never conduct a surprise audit.
   		Fraud prevention and deterrence are interchangeable terms.

2.5 points

Question 38

1. From the article To Catch a Liar which of the following is false?

   		There are no distinctions between interviewing and interrogating an employee while investigating a fraud.
   		Analyzing speech patterns and reading body language can help identify a liar.
   		Prepare the interview and be friendly.
   		Very few organizations are equipped to handle executive-level fraud.

2.5 points

Question 39

1. Non-Cash misappropriations of assets may be prevented or detected by:

   		Segregation of duties.
   		Matching invoices to receiving reports before payments are issued.
   		Matching packing slips to approved sales orders.
   		Matching every outgoing shipment to the sales order before the merchandise is shipped.
   		Examining significant increases in bad debt expense.
   		All of the above.