Forensic Accounting (International Edition) 4e Mark Zimbelman Steve
Albrecht, Conan Albrecht Chad Albrecht (Test Bank All Chapters, 100%
Original Verified, A+ Grade)
Chapter 1—The Nature of Fraud
MULTIPLE CHOICE
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.
ANS: B
Feedback
A Incorrect. This is a characteristic of civil law; criminal law deals with crimes against the
public.
B Correct. Criminal trials must result in an unanimous verdict.
C Incorrect. This is a characteristic of civil law; criminal trial juries must have 12 persons.
D Incorrect. This is a characteristic of civil law; criminal law permits only one claim at a
time.
PTS: 1
2. Which of the following is NOT an element of a Ponzi scheme?
a. Gaining other's confidence.
b. Promising abnormally high returns.
c. Collected money is invested in government bonds.
d. Investment principle is partially used to make payments to previous investors.
ANS: C
Feedback
A Incorrect. This is one of the most important elements of the 'con'.
B Incorrect. This is how fraudsters lure in investors.
C Correct. This is very unlikely.
D Incorrect. The original principle is often used to make interest payments.
PTS: 1
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. filing income tax that excludes income from fraud may be considered an improper tax
filing.
c. bribes may be deducted as legitimate business expenses.
d. failure to report income from fraud may be grounds for being charged with tax evasion.
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, ANS: 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.
PTS: 1
4. Which one of the following is NOT a characteristic of a criminal proceeding?
a. Deals with offenses against society.
b. Consequences include restitution and damage payments.
c. Jury of 12 individuals.
d. Only one claim may be heard at a time.
ANS: B
Feedback
A Incorrect. A crime is considered as an offense against society as a whole.
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 one action.
PTS: 1
5. Management fraud is often referred to as:
a. stockholder fraud.
b. financial statement fraud.
c. affinity fraud.
d. investment fraud.
ANS: B
Feedback
A Incorrect.
B Correct.
C Incorrect.
D Incorrect.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
,6. What is required to prove fraud, as opposed to negligence?
a. Gross error
b. Intent
c. Preponderance of the evidence
d. Confession from the perpetrator
ANS: B
Feedback
A Incorrect. Gross error is not sufficient evidence to prove fraud.
B Correct.
C Incorrect. This is what is proven in a civil case.
D Incorrect. Confession is not required to prove fraud. In fact, many perpetrators never
admit their guilt.
PTS: 1
7. Which of the following is the most common type of occupational fraud?
a. Financial statement fraud
b. Mail fraud
c. Investment fraud
d. Employee embezzlement
ANS: D
Feedback
A Incorrect.
B Incorrect.
C Incorrect.
D Correct.
PTS: 1
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. Pressure to earn year-end bonuses.
ANS: 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. Many managers commit fraud to receive large bonuses that are dependent
upon financial performance.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, 9. Customer fraud includes all of the following EXCEPT:
a. Get something for nothing.
b. Do not pay for goods purchased.
c. Fraud perpetrated through collusion between buyers and vendors.
d. Deceive organization into giving them something they should not.
ANS: C
Feedback
A Incorrect. This 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.
PTS: 1
10. Which of the following is a common example of vendor fraud?
a. Fraud perpetrated through collusion between buyers and vendors.
b. Fraud perpetrated by buyers acting alone.
c. The perpetrator physically removes the inventory from the business premises.
d. A fraud perpetrated through an unintentional mistake.
ANS: A
Feedback
A Correct.
B Incorrect.
C Incorrect
D Incorrect.
PTS: 1
11. 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?
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.
ANS: C
Feedback
A Incorrect.
B Incorrect.
C Correct.
D Incorrect.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Albrecht, Conan Albrecht Chad Albrecht (Test Bank All Chapters, 100%
Original Verified, A+ Grade)
Chapter 1—The Nature of Fraud
MULTIPLE CHOICE
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.
ANS: B
Feedback
A Incorrect. This is a characteristic of civil law; criminal law deals with crimes against the
public.
B Correct. Criminal trials must result in an unanimous verdict.
C Incorrect. This is a characteristic of civil law; criminal trial juries must have 12 persons.
D Incorrect. This is a characteristic of civil law; criminal law permits only one claim at a
time.
PTS: 1
2. Which of the following is NOT an element of a Ponzi scheme?
a. Gaining other's confidence.
b. Promising abnormally high returns.
c. Collected money is invested in government bonds.
d. Investment principle is partially used to make payments to previous investors.
ANS: C
Feedback
A Incorrect. This is one of the most important elements of the 'con'.
B Incorrect. This is how fraudsters lure in investors.
C Correct. This is very unlikely.
D Incorrect. The original principle is often used to make interest payments.
PTS: 1
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. filing income tax that excludes income from fraud may be considered an improper tax
filing.
c. bribes may be deducted as legitimate business expenses.
d. failure to report income from fraud may be grounds for being charged with tax evasion.
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, ANS: 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.
PTS: 1
4. Which one of the following is NOT a characteristic of a criminal proceeding?
a. Deals with offenses against society.
b. Consequences include restitution and damage payments.
c. Jury of 12 individuals.
d. Only one claim may be heard at a time.
ANS: B
Feedback
A Incorrect. A crime is considered as an offense against society as a whole.
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 one action.
PTS: 1
5. Management fraud is often referred to as:
a. stockholder fraud.
b. financial statement fraud.
c. affinity fraud.
d. investment fraud.
ANS: B
Feedback
A Incorrect.
B Correct.
C Incorrect.
D Incorrect.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
,6. What is required to prove fraud, as opposed to negligence?
a. Gross error
b. Intent
c. Preponderance of the evidence
d. Confession from the perpetrator
ANS: B
Feedback
A Incorrect. Gross error is not sufficient evidence to prove fraud.
B Correct.
C Incorrect. This is what is proven in a civil case.
D Incorrect. Confession is not required to prove fraud. In fact, many perpetrators never
admit their guilt.
PTS: 1
7. Which of the following is the most common type of occupational fraud?
a. Financial statement fraud
b. Mail fraud
c. Investment fraud
d. Employee embezzlement
ANS: D
Feedback
A Incorrect.
B Incorrect.
C Incorrect.
D Correct.
PTS: 1
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. Pressure to earn year-end bonuses.
ANS: 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. Many managers commit fraud to receive large bonuses that are dependent
upon financial performance.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, 9. Customer fraud includes all of the following EXCEPT:
a. Get something for nothing.
b. Do not pay for goods purchased.
c. Fraud perpetrated through collusion between buyers and vendors.
d. Deceive organization into giving them something they should not.
ANS: C
Feedback
A Incorrect. This 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.
PTS: 1
10. Which of the following is a common example of vendor fraud?
a. Fraud perpetrated through collusion between buyers and vendors.
b. Fraud perpetrated by buyers acting alone.
c. The perpetrator physically removes the inventory from the business premises.
d. A fraud perpetrated through an unintentional mistake.
ANS: A
Feedback
A Correct.
B Incorrect.
C Incorrect
D Incorrect.
PTS: 1
11. 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?
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.
ANS: C
Feedback
A Incorrect.
B Incorrect.
C Correct.
D Incorrect.
PTS: 1
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
