Choose the best answer to the following questions.
A. Which of the following best describes the objective of a fraud examination?
- Make recommendations to management about how to prevent fraud
- Determine whether a crime has been committed, and if so, who is responsible
- Determine whether financial statements are free of misstatements due to fraud
- Express an opinion on the guilt or innocence of a suspect
Determine whether a crime has been committed, and if so, who is responsible
B. What are the three main components of what is known as the Fraud Triangle?
- Greed, opportunity and motive
- Motivation, opportunity and rationalization
- Opportunity, motive and financial need
- Pressure, motive and financial need
Motivation, opportunity and rationalization
C. Alice Durant works in the accounts payable department for the BC group. She recently found out that Delia Gardner, another A/P clerk, received a bigger raise than she did, even though Durant has been with the company longer and frequently has to correct Gardner’s errors. Which leg of the Fraud Triangle best applies to Durant’s situation?
- Perceived opportunity
- Non-sharable financial need
D. When Jill Michaels, an assistant to the director of procurement, moved into her new home, she used the company’s flatbed truck to move her furnishings on an afternoon when her boss was out of town. Which of the following best describes what Michaels has done?
E. Skimming can be either an on-book scheme or an off-book scheme, depending on whether cash or a check is stolen.
F. A method of concealing receivables skimming by crediting one account while abstracting money from a different account is known as:
- Account substitution
G. A detailed fraud prevention policy can give management legal grounds to investigate and punish violators.
H. Given all of the following fraud prevention methods within organizations, which one is probably the most effective?
- Screening employees
- Having an open-door policy
- Increasing the perception of detection
- Reducing rationalization
Increasing the perception of detection
Congratulations if you got 6 or more correct! You have a good start to fraud awareness!