, TESTBANK FOR Fraud Examination 7th Edition Albrecht
Important Notes
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provided.
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editions.
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,Chapter 01 - The Nature of Fraud
1. One way that criminal law differs from civil law is that it:
a. provides remedies for violations of private rights.
b. must yield a unanimous verdict.
c. can have a jury of fewer than 12 persons.
d. allows for various claims in one action.
ANSWER: b
FEEDBACK: a. Incorrect. The requirement to provide remedies for violations of
private rights is a characteristic of civil law; criminal law deals
with crimes against society as a whole.
b. Correct. Criminal trials must result in a unanimous verdict.
c. Incorrect. The requirement for a unanimous vote characteristic of
civil law; criminal trial juries must have 12 persons.
d. Incorrect. In inclusion of various claims in one action is a
characteristic of civil law; criminal law permits only one claim at a
time.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal and Civil Prosecution of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/8/2024 7:10 AM
DATE MODIFIED: 2/8/2024 7:14 AM
2. Which of the following is NOT an common element of a Ponzi scheme?
a. Gaining other's confidence
b. Promising abnormally high returns
c. Investing collected money
d. Using part of the investment principle to pay previous investors
ANSWER: c
FEEDBACK: a. Incorrect. Gaining other’s confidence is one of the most important
elements of the “con.”
b. Incorrect. Promising abnormally high returns is how fraudsters
lure in investors.
c. Correct. Investing collected money is very unlikely.
d. Incorrect. In Ponzi schemes, the original principle is often used to
make interest payments.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Types of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e , revised
DATE CREATED: 2/9/2024 5:11 AM
DATE MODIFIED: 2/9/2024 5:32 AM
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 01 - The Nature of Fraud
3. The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:
a. not reporting bribe income may be grounds for being charged with tax evasion.
b. a tax filing that excludes income from fraud may be considered a false return.
c. bribes may be lawfully deducted as business expenses.
d. failure to report income from fraud may be grounds for being charged with tax evasion.
ANSWER: c
FEEDBACK: a. Incorrect. Not reporting bribe income may be grounds for being
charged with tax evasion.
b. Incorrect. Filing income tax that excludes income from fraud may
be considered an improper tax filing.
c. Correct. Bribes cannot be deducted as legitimate business
expenses.
d. Incorrect. Failure to report income from fraud or bribes may be
prosecuted as tax evasion.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 5:38 AM
DATE MODIFIED: 2/9/2024 5:40 AM
4. Which one of the following is NOT a characteristic of a criminal proceeding?
a. Criminal proceedings deal with offenses against society.
b. Consequences of criminal proceedings include restitution and damage payments.
c. Criminal proceedings involve a jury of 12 individuals.
d. In criminal proceedings, only one claim may be heard at a time.
ANSWER: b
FEEDBACK: a. Incorrect. A crime is considered an offense against society.
b. Correct. In a criminal proceeding, the consequences are jail
and/or fines.
c. Incorrect. A criminal jury consists of 12 jurors.
d. Incorrect. Only one claim is heard at a time, whereas in a civil
case many claims may be joined into a single case.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:36 AM
DATE MODIFIED: 2/9/2024 6:38 AM
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 01 - The Nature of Fraud
5. Management fraud is often referred to as:
a. stockholder fraud.
b. financial statement fraud.
c. employee fraud.
d. investment fraud.
ANSWER: b
FEEDBACK: a. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
b. Correct. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
c. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
d. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Management Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:39 AM
DATE MODIFIED: 2/9/2024 6:43 AM
6. What is required to prove fraud, as opposed to error?
a. Negligence
b. Intent
c. Preponderance of the evidence
d. Confession from the perpetrator
ANSWER: b
FEEDBACK: a. Incorrect. Negligence does not constitute fraud because it lacks
intent to gain advantage over the victim through false pretenses.
b. Correct. To succeed in a criminal or civil prosecution, it is usually
necessary to show that the perpetrator acted with intent to
defraud the victim.
c. Incorrect. Preponderance of the evidence is what is proven in
any civil case and is not specific to fraud.
d. Incorrect. Confession is not required to prove fraud. In fact, many
perpetrators never admit their guilt.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Criminal and Civil Prosecution of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 01 - The Nature of Fraud
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:43 AM
DATE MODIFIED: 2/9/2024 6:44 AM
7. Which of the following is the most common type of occupational fraud?
a. Management fraud
b. Mail fraud
c. Investment fraud
d. Employee embezzlement
ANSWER: d
FEEDBACK: a. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
b. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
c. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
d. Correct. Employee embezzlement is the most common type of
occupational fraud.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Employee Embezzlement
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:45 AM
DATE MODIFIED: 2/9/2024 6:47 AM
8. Which of the following is NOT a characteristic of management fraud?
a. Top management deception
b. Manipulation of financial statements
c. Kickbacks or bribes
d. Hidden losses and fictitious revenues
ANSWER: c
FEEDBACK: a. Incorrect. Management fraud often involves top management's
deceptive manipulation. Management fraud is when the top
management deceives stockholders.
b. Incorrect. Management often uses the manipulation of financial
statements to commit fraud. This is one of the easiest ways to
commit a large fraud.
c. Correct. These are examples of employee embezzlement.
Management fraud usually deals with financial statement
manipulation.
d. Incorrect. In an effort to inflate reportable profit, managers may
hide losses and exaggerate revenues.
POINTS: 1
DIFFICULTY: easy
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 01 - The Nature of Fraud
REFERENCES: Management Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:48 AM
DATE MODIFIED: 2/9/2024 6:49 AM
9. Customer fraud includes all of the following EXCEPT:
a. paying too little for goods received.
b. not paying for goods purchased.
c. receiving improper payments through collusion between buyers and vendors.
d. deceiving the organization into giving the customer something that it should not.
ANSWER: c
FEEDBACK: a. Incorrect. Paying too little for goods received is an example of
customer fraud.
b. Incorrect. This is an example of customer fraud.
c. Correct. This is an example of vendor fraud.
d. Incorrect. This is an example of customer fraud.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Customer Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6erevised
DATE CREATED: 2/9/2024 6:50 AM
DATE MODIFIED: 2/9/2024 6:51 AM
10. Which of the following is a frequently involved in of vendor fraud?
a. C Participation of buyers from the company being defrauded
b. False financial statement reporting by upper management
c. Physical removal of inventory from the business premises
d. Diversion of funds by an employee. manipulation
ANSWER: a
FEEDBACK: a. Correct. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
b. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
c. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
d. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Vendor Fraud
QUESTION TYPE: Multiple Choice
Copyright Cengage Learning. Powered by Cognero. Page 5
,Chapter 01 - The Nature of Fraud
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:52 AM
DATE MODIFIED: 2/9/2024 6:54 AM
11. Government agencies such as the FBI, FDIC, FTC, and the IRS publish fraud statistics from time to
time. Which of the following observations concerning such statistics is true?
a. Generally, their statistics are complete.
b. Such information is rarely used.
c. They provide only those statistics related to their jurisdiction.
d. They usually provide a total picture in the areas for which they have responsibility.
ANSWER: c
FEEDBACK: a. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
b. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
c. Correct. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
d. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:54 AM
DATE MODIFIED: 2/9/2024 6:56 AM
12. Which legal code makes the bribing of public officials and witnesses illegal?
a. Title 18, U.S. Code §201
b. Title 41, U.S. Code §51 to 58
c. Title 18, U.S. Code Section §1341
d. Title 18, U.S. Code Section §1344
ANSWER: a
FEEDBACK: a. Correct. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
b. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
Copyright Cengage Learning. Powered by Cognero. Page 6
,Chapter 01 - The Nature of Fraud
c. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
d. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:57 AM
DATE MODIFIED: 2/9/2024 6:58 AM
13. Fraud has a direct dollar-for-dollar impact on a company's:
a. revenues.
b. net income.
c. profit margin.
d. stock price.
ANSWER: b
FEEDBACK: a. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
b. Correct. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
c. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
d. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:59 AM
DATE MODIFIED: 2/9/2024 7:00 AM
14. Which of the following is NOT a primary reason for the increased size and number of frauds?
a. The advent of computers
b. Complex accounting systems
c. Prevalence of electronic assets
d. The Internet
ANSWER: c
FEEDBACK: a. Incorrect. This is a primary reason for the increased frequency of
fraud.
Copyright Cengage Learning. Powered by Cognero. Page 7
, Chapter 01 - The Nature of Fraud
b. Incorrect. This is a primary reason for the increased frequency of
fraud.
c. Correct. With the advent of computers and the Internet,
fraudulent asset misplacement can be accomplished without the
need for physical possession of stolen property.
d. Incorrect. This is a primary reason for the increased frequency of
fraud.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 7:02 AM
DATE MODIFIED: 2/9/2024 7:03 AM
15. Which of the following statements regarding civil law is correct?
a. When fraud is committed, criminal prosecution usually precedes civil prosecution.
b. Civil law is the body of law that provides remedies for crimes against society.
c. Civil cases must be heard by 12 jurors.
d. In a civil case, the verdict of the jury must be unanimous.
ANSWER: a
FEEDBACK: a. Correct. Fraud may result in both civil and criminal charges;
criminal prosecution usually proceeds first.
b. Incorrect. Civil law is the body of law that provides remedies for
violations of private rights.
c. Incorrect. Civil cases are often heard by a judge only or by as few
as 6 jurors.
d. Incorrect. The verdict of the jury need not be unanimous.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Civil Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 7:11 AM
DATE MODIFIED: 2/14/2024 11:49 PM
16. Fraud is deception that includes all of the following EXCEPT:
a. a material point is misrepresented.
b. the misrepresentation is intentional.
c. the misrepresentation is known to the victim.
d. the victim must sustain damages.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 8
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Chapter 01 - The Nature of Fraud
1. One way that criminal law differs from civil law is that it:
a. provides remedies for violations of private rights.
b. must yield a unanimous verdict.
c. can have a jury of fewer than 12 persons.
d. allows for various claims in one action.
ANSWER: b
FEEDBACK: a. Incorrect. The requirement to provide remedies for violations of
private rights is a characteristic of civil law; criminal law deals
with crimes against society as a whole.
b. Correct. Criminal trials must result in a unanimous verdict.
c. Incorrect. The requirement for a unanimous vote characteristic of
civil law; criminal trial juries must have 12 persons.
d. Incorrect. In inclusion of various claims in one action is a
characteristic of civil law; criminal law permits only one claim at a
time.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal and Civil Prosecution of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/8/2024 7:10 AM
DATE MODIFIED: 2/8/2024 7:14 AM
2. Which of the following is NOT an common element of a Ponzi scheme?
a. Gaining other's confidence
b. Promising abnormally high returns
c. Investing collected money
d. Using part of the investment principle to pay previous investors
ANSWER: c
FEEDBACK: a. Incorrect. Gaining other’s confidence is one of the most important
elements of the “con.”
b. Incorrect. Promising abnormally high returns is how fraudsters
lure in investors.
c. Correct. Investing collected money is very unlikely.
d. Incorrect. In Ponzi schemes, the original principle is often used to
make interest payments.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Types of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e , revised
DATE CREATED: 2/9/2024 5:11 AM
DATE MODIFIED: 2/9/2024 5:32 AM
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 01 - The Nature of Fraud
3. The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:
a. not reporting bribe income may be grounds for being charged with tax evasion.
b. a tax filing that excludes income from fraud may be considered a false return.
c. bribes may be lawfully deducted as business expenses.
d. failure to report income from fraud may be grounds for being charged with tax evasion.
ANSWER: c
FEEDBACK: a. Incorrect. Not reporting bribe income may be grounds for being
charged with tax evasion.
b. Incorrect. Filing income tax that excludes income from fraud may
be considered an improper tax filing.
c. Correct. Bribes cannot be deducted as legitimate business
expenses.
d. Incorrect. Failure to report income from fraud or bribes may be
prosecuted as tax evasion.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 5:38 AM
DATE MODIFIED: 2/9/2024 5:40 AM
4. Which one of the following is NOT a characteristic of a criminal proceeding?
a. Criminal proceedings deal with offenses against society.
b. Consequences of criminal proceedings include restitution and damage payments.
c. Criminal proceedings involve a jury of 12 individuals.
d. In criminal proceedings, only one claim may be heard at a time.
ANSWER: b
FEEDBACK: a. Incorrect. A crime is considered an offense against society.
b. Correct. In a criminal proceeding, the consequences are jail
and/or fines.
c. Incorrect. A criminal jury consists of 12 jurors.
d. Incorrect. Only one claim is heard at a time, whereas in a civil
case many claims may be joined into a single case.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:36 AM
DATE MODIFIED: 2/9/2024 6:38 AM
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 01 - The Nature of Fraud
5. Management fraud is often referred to as:
a. stockholder fraud.
b. financial statement fraud.
c. employee fraud.
d. investment fraud.
ANSWER: b
FEEDBACK: a. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
b. Correct. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
c. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
d. Incorrect. In its most common form, management fraud involves
top management's deceptive manipulation of financial
statements.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Management Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:39 AM
DATE MODIFIED: 2/9/2024 6:43 AM
6. What is required to prove fraud, as opposed to error?
a. Negligence
b. Intent
c. Preponderance of the evidence
d. Confession from the perpetrator
ANSWER: b
FEEDBACK: a. Incorrect. Negligence does not constitute fraud because it lacks
intent to gain advantage over the victim through false pretenses.
b. Correct. To succeed in a criminal or civil prosecution, it is usually
necessary to show that the perpetrator acted with intent to
defraud the victim.
c. Incorrect. Preponderance of the evidence is what is proven in
any civil case and is not specific to fraud.
d. Incorrect. Confession is not required to prove fraud. In fact, many
perpetrators never admit their guilt.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Criminal and Civil Prosecution of Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 01 - The Nature of Fraud
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:43 AM
DATE MODIFIED: 2/9/2024 6:44 AM
7. Which of the following is the most common type of occupational fraud?
a. Management fraud
b. Mail fraud
c. Investment fraud
d. Employee embezzlement
ANSWER: d
FEEDBACK: a. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
b. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
c. Incorrect. Employee embezzlement is the most common type of
occupational fraud.
d. Correct. Employee embezzlement is the most common type of
occupational fraud.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Employee Embezzlement
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:45 AM
DATE MODIFIED: 2/9/2024 6:47 AM
8. Which of the following is NOT a characteristic of management fraud?
a. Top management deception
b. Manipulation of financial statements
c. Kickbacks or bribes
d. Hidden losses and fictitious revenues
ANSWER: c
FEEDBACK: a. Incorrect. Management fraud often involves top management's
deceptive manipulation. Management fraud is when the top
management deceives stockholders.
b. Incorrect. Management often uses the manipulation of financial
statements to commit fraud. This is one of the easiest ways to
commit a large fraud.
c. Correct. These are examples of employee embezzlement.
Management fraud usually deals with financial statement
manipulation.
d. Incorrect. In an effort to inflate reportable profit, managers may
hide losses and exaggerate revenues.
POINTS: 1
DIFFICULTY: easy
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 01 - The Nature of Fraud
REFERENCES: Management Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:48 AM
DATE MODIFIED: 2/9/2024 6:49 AM
9. Customer fraud includes all of the following EXCEPT:
a. paying too little for goods received.
b. not paying for goods purchased.
c. receiving improper payments through collusion between buyers and vendors.
d. deceiving the organization into giving the customer something that it should not.
ANSWER: c
FEEDBACK: a. Incorrect. Paying too little for goods received is an example of
customer fraud.
b. Incorrect. This is an example of customer fraud.
c. Correct. This is an example of vendor fraud.
d. Incorrect. This is an example of customer fraud.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Customer Fraud
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6erevised
DATE CREATED: 2/9/2024 6:50 AM
DATE MODIFIED: 2/9/2024 6:51 AM
10. Which of the following is a frequently involved in of vendor fraud?
a. C Participation of buyers from the company being defrauded
b. False financial statement reporting by upper management
c. Physical removal of inventory from the business premises
d. Diversion of funds by an employee. manipulation
ANSWER: a
FEEDBACK: a. Correct. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
b. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
c. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
d. Incorrect. Vendor fraud frequently involves participation of buyers
from the company being defrauded.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Vendor Fraud
QUESTION TYPE: Multiple Choice
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,Chapter 01 - The Nature of Fraud
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.3 - Understand Different Types of Fraud.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:52 AM
DATE MODIFIED: 2/9/2024 6:54 AM
11. Government agencies such as the FBI, FDIC, FTC, and the IRS publish fraud statistics from time to
time. Which of the following observations concerning such statistics is true?
a. Generally, their statistics are complete.
b. Such information is rarely used.
c. They provide only those statistics related to their jurisdiction.
d. They usually provide a total picture in the areas for which they have responsibility.
ANSWER: c
FEEDBACK: a. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
b. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
c. Correct. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
d. Incorrect. Government agencies only publish those statistics that
are directly related to their jurisdictions. As a result, their statistics
are not complete and do not provide a total picture of fraud—
even in the areas for which they have responsibility.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:54 AM
DATE MODIFIED: 2/9/2024 6:56 AM
12. Which legal code makes the bribing of public officials and witnesses illegal?
a. Title 18, U.S. Code §201
b. Title 41, U.S. Code §51 to 58
c. Title 18, U.S. Code Section §1341
d. Title 18, U.S. Code Section §1344
ANSWER: a
FEEDBACK: a. Correct. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
b. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
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,Chapter 01 - The Nature of Fraud
c. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
d. Incorrect. Title 18, U.S. Code Section 201 outlaws the bribing of
public officials.
POINTS: 1
DIFFICULTY: easy
REFERENCES: Criminal Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:57 AM
DATE MODIFIED: 2/9/2024 6:58 AM
13. Fraud has a direct dollar-for-dollar impact on a company's:
a. revenues.
b. net income.
c. profit margin.
d. stock price.
ANSWER: b
FEEDBACK: a. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
b. Correct. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
c. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
d. Incorrect. Fraud has a direct dollar-for-dollar impact on a
company’s net income.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 6:59 AM
DATE MODIFIED: 2/9/2024 7:00 AM
14. Which of the following is NOT a primary reason for the increased size and number of frauds?
a. The advent of computers
b. Complex accounting systems
c. Prevalence of electronic assets
d. The Internet
ANSWER: c
FEEDBACK: a. Incorrect. This is a primary reason for the increased frequency of
fraud.
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, Chapter 01 - The Nature of Fraud
b. Incorrect. This is a primary reason for the increased frequency of
fraud.
c. Correct. With the advent of computers and the Internet,
fraudulent asset misplacement can be accomplished without the
need for physical possession of stolen property.
d. Incorrect. This is a primary reason for the increased frequency of
fraud.
POINTS: 1
DIFFICULTY: moderate
REFERENCES: Seriousness of the Fraud Problem
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.1 - Understand the seriousness of fraud and how it affects
individuals, consumers, organizations, and society.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 7:02 AM
DATE MODIFIED: 2/9/2024 7:03 AM
15. Which of the following statements regarding civil law is correct?
a. When fraud is committed, criminal prosecution usually precedes civil prosecution.
b. Civil law is the body of law that provides remedies for crimes against society.
c. Civil cases must be heard by 12 jurors.
d. In a civil case, the verdict of the jury must be unanimous.
ANSWER: a
FEEDBACK: a. Correct. Fraud may result in both civil and criminal charges;
criminal prosecution usually proceeds first.
b. Incorrect. Civil law is the body of law that provides remedies for
violations of private rights.
c. Incorrect. Civil cases are often heard by a judge only or by as few
as 6 jurors.
d. Incorrect. The verdict of the jury need not be unanimous.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Civil Law
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FRAU.ALBR.25.1.5 - Understand the differences between criminal and civil
fraud laws.
OTHER: Source: 6e revised
DATE CREATED: 2/9/2024 7:11 AM
DATE MODIFIED: 2/14/2024 11:49 PM
16. Fraud is deception that includes all of the following EXCEPT:
a. a material point is misrepresented.
b. the misrepresentation is intentional.
c. the misrepresentation is known to the victim.
d. the victim must sustain damages.
ANSWER: c
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