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Name Chapter 1--The Nature of Fraud
Description
Instructions Modify
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Question One way that criminal law differs from civil law is that it:
Answer provides remedies for violations of private rights.
must yield a unanimous verdict.
can have a jury of fewer than 12 persons.
allows for various claims in one action.
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Question Which of the following is NOT an element of a Ponzi scheme?
Answer Gaining other's confidence.
Promising abnormally high returns.
Collected money is invested in government bonds.
Investment principle is partially used to make payments to previous investors.
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Question The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:
Answer not reporting bribe income may be grounds for being charged with tax evasion.
filing income tax that excludes income from fraud may be considered an improper tax filing.
bribes may be deducted as legitimate business expenses.
failure to report income from fraud may be grounds for being charged with tax evasion.
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Question Which one of the following is NOT a characteristic of a criminal proceeding?
Answer Deals with offenses against society.
Consequences include restitution and damage payments.
Jury of 12 individuals.
Only one claim may be heard at a time.
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Question Management fraud is often referred to as:
Answer stockholder fraud.
financial statement fraud.
affinity fraud.
investment fraud.
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Question What is required to prove fraud, as opposed to negligence?
Answer Gross error
Intent
Preponderance of the evidence
Confession from the perpetrator
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Question Which of the following is the most common type of occupational fraud?
Answer Financial statement fraud
Mail fraud
Investment fraud
Employee embezzlement
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Question Which of the following is NOT a characteristic of management fraud?
Answer Top management deception.
Manipulation of financial statements.
Kickbacks or bribes.
, 2 of 6
Pressure to earn year-end bonuses.
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Question Customer fraud includes all of the following EXCEPT:
Answer Get something for nothing.
Do not pay for goods purchased.
Fraud perpetrated through collusion between buyers and vendors.
Deceive organization into giving them something they should not.
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Question Which of the following is a common example of vendor fraud?
Answer Fraud perpetrated through collusion between buyers and vendors.
Fraud perpetrated by buyers acting alone.
The perpetrator physically removes the inventory from the business premises.
A fraud perpetrated through an unintentional mistake.
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Question Government agencies such as the FBI, FDIC, IRS, or various health agencies publish fraud statistics from time to time. Which of the
following observations concerning such statistics is true?
Answer Generally, their statistics are complete.
Such information is rarely used.
They provide only those statistics related to their jurisdiction.
They usually provide a total picture in the areas for which they have responsibility.
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Question Which legal code makes the bribing of public officials illegal?
Answer Title 18, U.S. Code Section 201
Title 41, U.S. Code Section 51 to 58
Title 18, U.S. Code Section 1341
Title 18, U.S. Code Section 1344
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Question Fraud has a direct dollar for dollar impact on a company's:
Answer Revenues.
Net income.
Profit margin.
Stock price.
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Question Which of the following is NOT a primary reason for increased size and number of frauds?
Answer The advent of computers
Complex accounting systems
Increased centralization of businesses
The Internet
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Question Which among the following frauds is most likely to be a civil charge?
Answer Racketeering
Mail fraud
Defamation
Perjury
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Question The elements of fraud include all of the following EXCEPT:
Answer a material point is misrepresented.
the misrepresentation is intentional.
the misrepresentation is known to the victim.
the victim must sustain damages.
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Question The burden of proof in a criminal case must:
Answer be beyond a reasonable doubt.
be the preponderance of knowledge and power.
be preponderance of evidence.
lie with the defendant.
, 3 of 6
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Question Which of the following statements about criminal and civil cases is correct?
Answer The purpose of a criminal case is "to right a wrong", the purpose of civil case is to obtain a remedy.
Jury must have 12 people in civil cases but in criminal cases may consist of fewer than 12 persons.
Both criminal cases and civil cases require a fraud perpetrator to go to jail.
Only one claim at a time in civil cases however in criminal cases, various claims may be joined in one action.
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Question How is the confidence element established in a Ponzi scheme?
Answer By investing in prime bonds.
By issuing notarized certificates.
By paying returns to initial investors.
By returning money to all investors.
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Question The most common fraud committed on behalf of an organization is:
Answer Vendor fraud
Employee embezzlement
Fraudulent financial reporting
Customer fraud
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Question A company is a victim of a $414 million fraud. At that time its profit margin is 10%. How much additional revenue should the company
generate in order to recover the effect on net income?
Answer $41.4 million
$414 million
$4.14 billion
$41.4 billion
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Question Scammers often use their victim’s ethnic identity to gain their trust and then steal their life savings. This is an example of:
Answer vendor fraud.
affinity fraud.
embezzlement.
occupational fraud.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The Anti-Kickback Act of 1986 intends to prevent:
Answer bribery, by punishing perpetrators with up to 15 years in prison.
any scheme to defraud federally insured financial institutions.
the giving or receiving of any thing of value by a subcontractor to a prime contractor.
individuals from using insider information to purchase or sell a company's securities.
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Question Perpetrators of some fraud schemes often target conspiracy theorists, promising access to the “secret” investments used by the
Rothschilds or Saudi royalty and offer triple-digit returns. Such schemes are best described as:
Answer Affinity frauds.
Ponzi schemes.
Franchise frauds.
Prime bank schemes.
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Multiple Choice 0 points Modify Remove
Question Who are the primary victims of financial statement fraud?
Answer Middle management
Organizations that buy goods or services
Analysts
Stockholders
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Multiple Choice 0 points Modify Remove
Question Generally applicants for CFE certification should have a minimum of a bachelor’s degree or equivalent from an institution of higher
learning. Alternatively if applicants do not have a bachelor’s degree, they may substitute ______ months of fraud-related professional experience for
each year of academic study.
TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS
Pool Canvas
Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish
which default options, such as feedback and images, are available for question creation.
Add Creation Settings
Name Chapter 1--The Nature of Fraud
Description
Instructions Modify
Add Question Here
Multiple Choice 0 points Modify Remove
Question One way that criminal law differs from civil law is that it:
Answer provides remedies for violations of private rights.
must yield a unanimous verdict.
can have a jury of fewer than 12 persons.
allows for various claims in one action.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT an element of a Ponzi scheme?
Answer Gaining other's confidence.
Promising abnormally high returns.
Collected money is invested in government bonds.
Investment principle is partially used to make payments to previous investors.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:
Answer not reporting bribe income may be grounds for being charged with tax evasion.
filing income tax that excludes income from fraud may be considered an improper tax filing.
bribes may be deducted as legitimate business expenses.
failure to report income from fraud may be grounds for being charged with tax evasion.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which one of the following is NOT a characteristic of a criminal proceeding?
Answer Deals with offenses against society.
Consequences include restitution and damage payments.
Jury of 12 individuals.
Only one claim may be heard at a time.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Management fraud is often referred to as:
Answer stockholder fraud.
financial statement fraud.
affinity fraud.
investment fraud.
Add Question Here
Multiple Choice 0 points Modify Remove
Question What is required to prove fraud, as opposed to negligence?
Answer Gross error
Intent
Preponderance of the evidence
Confession from the perpetrator
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is the most common type of occupational fraud?
Answer Financial statement fraud
Mail fraud
Investment fraud
Employee embezzlement
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT a characteristic of management fraud?
Answer Top management deception.
Manipulation of financial statements.
Kickbacks or bribes.
, 2 of 6
Pressure to earn year-end bonuses.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Customer fraud includes all of the following EXCEPT:
Answer Get something for nothing.
Do not pay for goods purchased.
Fraud perpetrated through collusion between buyers and vendors.
Deceive organization into giving them something they should not.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is a common example of vendor fraud?
Answer Fraud perpetrated through collusion between buyers and vendors.
Fraud perpetrated by buyers acting alone.
The perpetrator physically removes the inventory from the business premises.
A fraud perpetrated through an unintentional mistake.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Government agencies such as the FBI, FDIC, IRS, or various health agencies publish fraud statistics from time to time. Which of the
following observations concerning such statistics is true?
Answer Generally, their statistics are complete.
Such information is rarely used.
They provide only those statistics related to their jurisdiction.
They usually provide a total picture in the areas for which they have responsibility.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which legal code makes the bribing of public officials illegal?
Answer Title 18, U.S. Code Section 201
Title 41, U.S. Code Section 51 to 58
Title 18, U.S. Code Section 1341
Title 18, U.S. Code Section 1344
Add Question Here
Multiple Choice 0 points Modify Remove
Question Fraud has a direct dollar for dollar impact on a company's:
Answer Revenues.
Net income.
Profit margin.
Stock price.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following is NOT a primary reason for increased size and number of frauds?
Answer The advent of computers
Complex accounting systems
Increased centralization of businesses
The Internet
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which among the following frauds is most likely to be a civil charge?
Answer Racketeering
Mail fraud
Defamation
Perjury
Add Question Here
Multiple Choice 0 points Modify Remove
Question The elements of fraud include all of the following EXCEPT:
Answer a material point is misrepresented.
the misrepresentation is intentional.
the misrepresentation is known to the victim.
the victim must sustain damages.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The burden of proof in a criminal case must:
Answer be beyond a reasonable doubt.
be the preponderance of knowledge and power.
be preponderance of evidence.
lie with the defendant.
, 3 of 6
Add Question Here
Multiple Choice 0 points Modify Remove
Question Which of the following statements about criminal and civil cases is correct?
Answer The purpose of a criminal case is "to right a wrong", the purpose of civil case is to obtain a remedy.
Jury must have 12 people in civil cases but in criminal cases may consist of fewer than 12 persons.
Both criminal cases and civil cases require a fraud perpetrator to go to jail.
Only one claim at a time in civil cases however in criminal cases, various claims may be joined in one action.
Add Question Here
Multiple Choice 0 points Modify Remove
Question How is the confidence element established in a Ponzi scheme?
Answer By investing in prime bonds.
By issuing notarized certificates.
By paying returns to initial investors.
By returning money to all investors.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The most common fraud committed on behalf of an organization is:
Answer Vendor fraud
Employee embezzlement
Fraudulent financial reporting
Customer fraud
Add Question Here
Multiple Choice 0 points Modify Remove
Question A company is a victim of a $414 million fraud. At that time its profit margin is 10%. How much additional revenue should the company
generate in order to recover the effect on net income?
Answer $41.4 million
$414 million
$4.14 billion
$41.4 billion
Add Question Here
Multiple Choice 0 points Modify Remove
Question Scammers often use their victim’s ethnic identity to gain their trust and then steal their life savings. This is an example of:
Answer vendor fraud.
affinity fraud.
embezzlement.
occupational fraud.
Add Question Here
Multiple Choice 0 points Modify Remove
Question The Anti-Kickback Act of 1986 intends to prevent:
Answer bribery, by punishing perpetrators with up to 15 years in prison.
any scheme to defraud federally insured financial institutions.
the giving or receiving of any thing of value by a subcontractor to a prime contractor.
individuals from using insider information to purchase or sell a company's securities.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Perpetrators of some fraud schemes often target conspiracy theorists, promising access to the “secret” investments used by the
Rothschilds or Saudi royalty and offer triple-digit returns. Such schemes are best described as:
Answer Affinity frauds.
Ponzi schemes.
Franchise frauds.
Prime bank schemes.
Add Question Here
Multiple Choice 0 points Modify Remove
Question Who are the primary victims of financial statement fraud?
Answer Middle management
Organizations that buy goods or services
Analysts
Stockholders
Add Question Here
Multiple Choice 0 points Modify Remove
Question Generally applicants for CFE certification should have a minimum of a bachelor’s degree or equivalent from an institution of higher
learning. Alternatively if applicants do not have a bachelor’s degree, they may substitute ______ months of fraud-related professional experience for
each year of academic study.
