Fraud ExaminationFraud Examination

JEOPARDYJEOPARDY

Level 1Level 1 Level 2Level 2Level 2Level 2 Level 3Level 3Level 3Level 3 Level 4Level 4 Level 5Level 5 Level 5Level 5

100100 100 100 100 100

200 200 200 200 200

300300 300 300 300 300

400 400 400 400 400

500 500 500 500 500

Level 1 for 100Level 1 for 100

Analyze data Analyze data

Following the fraud theory approach, the first step a fraud examiner should take is:Following the fraud theory approach, the first step a fraud examiner should take is:

Level 1 for 200Level 1 for 200

Neutral third-parties, corroborative witnesses, co-

conspirators, suspect

Neutral third-parties, corroborative witnesses, co-

conspirators, suspect

The correct order for a fraud examiner to follow when interviewing a witnesses?

The correct order for a fraud examiner to follow when interviewing a witnesses?

Level 1 for for 300Level 1 for for 300

W. Steve AlbrechtW. Steve Albrecht

The fraud scale was developed by whom?The fraud scale was developed by whom?

Level 1 for 400Level 1 for 400

In a study by Steve Albrecht, Marshall Romney, and Keith Howe, participants were asked to rank personal characteristics as motivating factors that contributed to fraud. The highest ranked factor was:

In a study by Steve Albrecht, Marshall Romney, and Keith Howe, participants were asked to rank personal characteristics as motivating factors that contributed to fraud. The highest ranked factor was:

Living beyond their meansLiving beyond their means

Level 1 forfor 500Level 1 forfor 500

Increasing the perception of detectionIncreasing the perception of detection

Research in the Hollinger-Clark study suggests that the best way to deter employee theft is by:

Research in the Hollinger-Clark study suggests that the best way to deter employee theft is by:

Level 2 for 100Level 2 for 100

SkimmingSkimming

____________________ is the theft of cash from a victim entity prior to its entry in an accounting system.

____________________ is the theft of cash from a victim entity prior to its entry in an accounting system.

Level 2 for 200Level 2 for 200

Unrecorded salesUnrecorded sales

The customer service department at JNC, Inc. has been receiving phone calls from customers for whom there is no record. This is a red flag of what type of scheme?

The customer service department at JNC, Inc. has been receiving phone calls from customers for whom there is no record. This is a red flag of what type of scheme?

Level 2 for 300Level 2 for 300

Sales skimmingSales skimming

George Albert was a property manager for a large apartment complex while he was going to college. One of his duties was to collect rent from the tenants. If rent was paid after the third of the month, a late fee was tacked on to the amount due. When a tenant paid his rent late, George would backdate the payment, record and remit only the rent portion to his employers, and pocket the late fee. This is an example of what type of fraud?

George Albert was a property manager for a large apartment complex while he was going to college. One of his duties was to collect rent from the tenants. If rent was paid after the third of the month, a late fee was tacked on to the amount due. When a tenant paid his rent late, George would backdate the payment, record and remit only the rent portion to his employers, and pocket the late fee. This is an example of what type of fraud?

Level 2 for 400Level 2 for 400

At the point of sale At the point of sale

Where do most larceny schemes involving cash occur?

Where do most larceny schemes involving cash occur?

Level 2 for 500Level 2 for 500

Separating the duties of the deposit function

Separating the duties of the deposit function

Most important factor in preventing cash larceny from the deposit is:

Most important factor in preventing cash larceny from the deposit is:

Level 3Level 3 for 100Level 3Level 3 for 100

Dorothy McNally stole $232 from the company deposit while on the way to the bank. She can conceal the theft by recording the missing amount on the

bank reconciliation as a(n):

Dorothy McNally stole $232 from the company deposit while on the way to the bank. She can conceal the theft by recording the missing amount on the

bank reconciliation as a(n):

Deposit in transit

Level 3Level 3 for 200Level 3Level 3 for 200

Shell companiesShell companies

Fictitious entities created for the sole purpose of committing fraud are called

Fictitious entities created for the sole purpose of committing fraud are called

Level 3Level 3 for 300Level 3Level 3 for 300

Pay-and-return schemes Pay-and-return schemes

____________________ are schemes in which the employee intentionally

mishandles payments that are owed to legitimate vendors.

____________________ are schemes in which the employee intentionally

mishandles payments that are owed to legitimate vendors.

Level 3Level 3 for 400Level 3Level 3 for 400

Ghost employeeGhost employee

A _______________ is an individual on the payroll who does not actually work for

the organization.

A _______________ is an individual on the payroll who does not actually work for

the organization.

Level 3Level 3 for 500Level 3Level 3 for 500

Overpayment of wagesOverpayment of wages

The most common method of misappropriating funds

from the payroll is:

The most common method of misappropriating funds

from the payroll is:

Level 4 for 100Level 4 for 100

Commission schemeCommission scheme

If an employee generates a much higher percentage of

uncollected sales than his coworkers, what type of scheme

might he be committing?

If an employee generates a much higher percentage of

uncollected sales than his coworkers, what type of scheme

might he be committing?

Level 4 for 200Level 4 for 200

Ghost employee scheme Ghost employee scheme

Ellie Weaver works for the JAG Group as the customer service supervisor. When

Joel Carter was hired into her department, she listed his start date as

one month before he actually began work. Accordingly, the payroll department

generated an extra paycheck for Carter, which Weaver intercepted and cashed at a

liquor store. What type of fraud is this?

Ellie Weaver works for the JAG Group as the customer service supervisor. When

Joel Carter was hired into her department, she listed his start date as

one month before he actually began work. Accordingly, the payroll department

generated an extra paycheck for Carter, which Weaver intercepted and cashed at a

liquor store. What type of fraud is this?

Level 4 for 300Level 4 for 300

Fictitious expense reimbursementFictitious expense reimbursement

Having a client pay for a hotel stay while also getting the expense reimbursed by your employer is what type of expense

reimbursement scheme?

Having a client pay for a hotel stay while also getting the expense reimbursed by your employer is what type of expense

reimbursement scheme?

Level 4 for 400Level 4 for 400

Multiple reimbursement Multiple reimbursement

Donna Holbrook, an administrative assistant at Mason Enterprises, charged some office

supplies to the company credit card. Several weeks later, she attached the store receipt from the purchase to an expense

report and requested reimbursement from the company. This is an example of which type of expense reimbursement scheme?

Donna Holbrook, an administrative assistant at Mason Enterprises, charged some office

supplies to the company credit card. Several weeks later, she attached the store receipt from the purchase to an expense

report and requested reimbursement from the company. This is an example of which type of expense reimbursement scheme?

Level 4 for 500Level 4 for 500

Senior management Senior management

The group that is the most likely to commit financial statement fraud per the COSO study?The group that is the most likely to commit

financial statement fraud per the COSO study?

Level 5 for 100Level 5 for 100

Fictitious revenueFictitious revenue

While conducting the annual audit of Bluebird Company’s financial statements, Elsie Finnegan, CFE, CPA, came across some fishy findings. The

company recorded several large and unusual sales at the end of the fiscal year to customers Elsie had

never heard of. Further, all of these sales occurred within the company’s specialty division, which had

previously been in danger of closing due to recurring losses. Based on these findings, what type of financial

statement fraud could likely be occurring?

While conducting the annual audit of Bluebird Company’s financial statements, Elsie Finnegan, CFE, CPA, came across some fishy findings. The

company recorded several large and unusual sales at the end of the fiscal year to customers Elsie had

never heard of. Further, all of these sales occurred within the company’s specialty division, which had

previously been in danger of closing due to recurring losses. Based on these findings, what type of financial

statement fraud could likely be occurring?

Level 5 for 200Level 5 for 200

Improper disclosuresImproper disclosures

Recurring attempts by management to justify marginal or inappropriate accounting treatments on the basis of materiality is a red flag associated with which type of financial statement fraud?

Recurring attempts by management to justify marginal or inappropriate accounting treatments on the basis of materiality is a red flag associated with which type of financial statement fraud?

Level 5 for 300Level 5 for 300

AssessmentAssessment

While conducting an interview, you have reason to believe that the respondent is not being truthful. What type of questions will

help you establish the respondent’s credibility?

While conducting an interview, you have reason to believe that the respondent is not being truthful. What type of questions will

help you establish the respondent’s credibility?

Level 5 for 400Level 5 for 400

ManipulatorsManipulators

During an interview, when an interviewee repeatedly fiddles with a pen or picks

lint from her clothing, she is giving non-verbal clues called:

During an interview, when an interviewee repeatedly fiddles with a pen or picks

lint from her clothing, she is giving non-verbal clues called:

Level 5 for 500Level 5 for 500

CorruptionCorruption

Identifying trends in over-purchased and/or obsolete inventory over several periods is a proactive computer audit test

that can be used to detect is?

Identifying trends in over-purchased and/or obsolete inventory over several periods is a proactive computer audit test

that can be used to detect is?