Forensic Accounting and Fraud Examination Week 1 Quiz Answers

Forensic Accounting and Fraud Examination Week 1 Quiz Answers

Hello Friends in this article i am gone to share Coursera Course: Forensic Accounting and Fraud Examination by the West Virginia University | Week 1 Quiz Answers with you..

Forensic Accounting and Fraud Examination Week 1 Quiz Answers

Week 1 Quiz Answers

Question 1)
To understand the importance of fraud, one should understand the losses that occur due to fraud each year. According to ACFE estimates, worldwide, how much is annually lost due to fraud?

  • US $60 billion
  • US $1 trillion
  • US 3.5 trillion

Question 2)
In terms of frequency of occurrence, the largest category of fraud is which of the following:

  • Asset misappropriation
  • Corruption
  • Financial reporting fraud, also known as financial statement fraud
  • Ponzi schemes such as the $60 billion Madoff fraud

Question 3)
The following industry is almost devoid of fraud:

  • Religious organizations and charities supporting the poor
  • Healthcare and related medical fields
  • Technology companies because technology ensures fraud will be less frequent and of lower dollar amounts
  • No industry is devoid of fraud

Question 4)
Fraud can be committed by:

  • intentional misapplication of accounting principles that guide the disclosure of financial information.
  • omission of events, transactions, or other significant information in the notes related to the financial statements.
  • alteration of the underlying accounting data.
  • All of the choices are correct.

Question 5)
Pressure is a form of motive.

  • True
  • False

Question 6)
With regard to auditing, fraud examination and forensic accounting, which statement is correct?

  • The three disciplines of auditing, fraud examination and forensic accounting seldom interact.
  • Most audits lead to fraud indicators that require fraud investigation
  • The risk assessment aspect of auditing require the use of forensic accounting and fraud examination
  • Auditing, fraud examination and forensic accounting sometimes overlap, depending on the nature and extent of facts and circumstances observed.

Question 7)
The interrelationship among auditing, fraud examination, and financial forensics is:

  • dynamic and changes over time.
  • based on the SOX Act and SAS 99.
  • established and maintained by legal structures and justice processes.
  • constant even while social and cultural pressures are exerted on it.

Question 8)
While a fraud examiner’s objective is to determine whether fraud has occurred and who is likely responsible, the financial forensics investigator’s objective is to:

  • gather the required financial and nonfinancial evidence to examine the allegations independently and determine their accuracy.
  • attempt to gather sufficient evidence to support or refute an audit opinion.
  • determine whether the allegations are reasonable based on both the financial and non-financial evidence.
  • calculate financial impact based on a specific formula(s).

Question 9)
Which of the following is NOT an attribute of the acronym M.I.C.E?

  • Ego
  • Motive
  • Coercion
  • Ideology

Question 10)
With regard to segregation of duties, which of the following is not one of the four major functions.

  • authorizing
  • correcting
  • recording
  • safeguarding

Question 11)
Please identify the most correct statement with respect to fraud victims:

  • Fraud perpetrators are generally female, lower income, single moms attempting to put meals on the table for their family.
  • Fraud victims are generally male, middle-aged, and respected members of their community before the fraud is discovered.
  • Small businesses and particularly small charities and not-for-profits, in many cases, cannot afford to become victims of fraud.
  • Large public companies, in many cases, cannot afford to become victims of fraud because they are victimized so frequently.

Question 12)
Under common law, which of the following is true?

  • Bankruptcy fraud is always pursued in criminal court.
  • Fraud can be prosecuted in criminal and civil court.
  • Fraud can be prosecuted only in criminal court.
  • Fraud is usually prosecuted only in civil court.

Question 13)
With regard to the fraud triangle, which of the following is correct with respect to the attribute “pressure”

  • “Pressure” is a perception, seemingly real to the fraud perpetrator, even if the same pressure might be considered insignificant by others.
  • “Pressure” is NOT an attribute of the fraud triangle.
  • “Pressure” is real and most citizens would commit fraud if under the same duress.
  • “Pressure” is not considered an attribute of motive.

Question 14)
With regard to the fraud triangle, which of the following statements is correct?

  • The fundamental premise of the Fraud Triangle suggests that when an ordinary person, or accidental fraudster, commits fraud, all three of the legs of the triangle must be present.
  • Pressure is the most critical and dominant attribute of the fraud triangle and the only one that must be present for a fraud to occur
  • Opportunity is the most critical and dominant attribute of the fraud triangle and the only one that must be present for a fraud to occur
  • Pressure and opportunity are the most critical and dominant attributes of the fraud triangle and the only ones that must be present for a fraud to occur

Question 15)
The acronym “M.I.C.E.”, as typical motivations of fraud perpetrators, stands for:

  • Motive, Ideology, Coercion, and Ego.
  • Money, Image, Capability, and Environment.
  • Money, Ideology, Coercion, and Ego.
  • Money, Ideology, Coercion, and Environment.

Question 16)
Which of the following is not one of the three-pronged processes of remediation?

  • Support for the legal process as it tries to resolve the matter in the legal environment.
  • The prevention and detection of a fraud that has already occurred.
  • The modification of operational processes, procedures, and internal controls to minimize the chances of a similar fraud recurring.
  • The recovery of losses through insurance, the legal system, or other means.

Question 17)
In this week, we introduce the Accidental Fraudster. Which of the following represent characteristics of the person, the Accidental Fraudster or the related fraud? (Mark all that apply.)

  • The act is seemingly out-of-character for the individual
  • The individual is a good person that makes a bad decision (or series of decisions).
  • Notwithstanding the specific fraud, the individual is considered to be law-abiding.
  • When learning of the fraud act, people that know the Accidental Fraudster are surprised.

Question 18)
The difference between fraud and errors is:

  • The materiality of the value involved.
  • Intent of those involved.
  • Whether it affects owners’ equity or not.
  • All of the choices are correct.

Question 19)
Which of the following with regard to fraud losses is NOT correct.

  • Fraud losses may include employee layoffs.
  • Fraud losses are seldom fatal to small businesses
  • Financial statement fraud losses may include losses to employee pension funds.
  • Fraud losses may result in investment losses.

Question 20)
From the list below, create the typical fraud perpetrator profile.

  • Male, high school education, young, general labor, and with the company for years.
  • Male, post-secondary education, middle aged, professional, and with the company for years.
  • Female, post-secondary education, middle aged, professional, and relatively new to the company.
  • Female, high school education, young, general labor, and relatively new to the company.

Question 21)
Which of the following statements is correct with regard to collusion?

  • Collusion is not an aspect of opportunity.
  • Collusion is involved in almost all frauds
  • Collusion is seldom responsible for management’s ability to override the system of internal control
  • Frauds involving collusion are difficult to detect.

Question 22)
Which of the following correctly reflects the common law understanding of fraud.

  • Fraud and corruption are basically the same crime.
  • Fraud can encompass any crime for gain that uses deception as its principal technique.
  • Fraud has three critical elements in most state courts but four elements at the federal level.
  • Common law prevents persons under 18 to be victims of fraud.

Question 23)
Which of the following is the most likely reason, as suggested by Cressey, that an employee tries to solve a financial problem in secret?

  • because they worry that someone else will want part of the money they steal.
  • because they are afraid they will have to go back to college.
  • because they are afraid of losing the approval of those around them.
  • because they are afraid of getting arrested.

Question 24)
Common violations pertaining to occupational fraud and abuse include all of the following except:

  • asset misappropriation.
  • corruption.
  • financial reporting fraud.
  • All of these are common violations.

Question 25)
Auditing is responsible for:

  • risk assessment and internal controls.
  • litigation support and redemption.
  • risk assessment and calculation of damages.
  • business valuation and risk assessment.

Question 26)
Forensic accounting can be defined as the intersection of:

  • accounting and the law.
  • auditing and fraud examination
  • accounting and forensics
  • auditing and the forensic triangle

Question 27)
The person most responsible for the creation of the fraud triangle.

  • Noted sociologist and criminologist Donald Cressey.
  • Noted alleged fraudster Bernard Madoff (Ponzi Scheme).
  • Noted alleged fraudster Thomas Coughlin (Wal-Mart)
  • “Fraudster Man”, built on the ACFE profile of the fraudster developed from the Reports to the Nations, led to the creation of the fraud triangle.

Question 28)
Thomas Coughlin was presented as a fraud example. Which of the following is the correct statement?

  • Once the evidence is examined, fraud and related financial crimes usually make sense.
  • Do not inflict your value system when trying to understand what others might do.
  • Fraud examiners should make sure that the facts, circumstances and evidence confirm their fraud theory of the case.
  • The evidence is not as important as the underlying assumptions.

Question 29)
One of the most important contributions of criminology to the study of fraud is:

  • the relationship of punishment to remediation.
  • none of the other answers are correct.
  • the M.I.C.E. concept.
  • the fraud triangle.

Question 30)
Thomas Coughlin was presented as a fraud example. Which of the following is the correct statement?

  • Mr. Coughlin as an alleged fraudster is a bad person who made a bad decision.
  • Mr. Coughlin, as a low level Wal-Mart employees risked little by allegedly committing a fraud
  • Mr. Coughlin is a great example of the accidental fraudster.
  • Mr. Coughlin’s alleged fraud was the fourth in a long string of fraud acts.

 

 

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