D550 Ethics for Accountants
Review Comprehensive
Questions (Frequently Tested)
with Verified Answers Graded
A+
Fraud - Answer: a deliberate misrepresentation to gain an advantage over another party (or
have them do something they might not ordinarily do)
Fraud in the FS, the misappropriation of assets (theft) and subsequent cover up, and disclosure
fraud - Answer: What are the different forms of fraud?
Asset Misappropriatiion Schemes - Answer: when an employee steals or misuses resources,
such as charging personal expenses to the company card while traveling on business trips
Corruption Schemes - Answer: include misusing one's position or influence in an organization
for personal gain
a tip (43% reported) - Answer: What was the most common detection method reported in 2016
ACFE survey?
,termination (66%) - Answer: What was the most common disciplinary method taken in
occupational fraud cases was?
- living beyond means (42%)
- financial difficulties (26%)
- unusually close association with vendor/customer
- control issues, unwillingness to share duties
- no behavioral red flags
- "wheeler-dealer" attitude
- irritability, suspiciousness, or defensiveness
- divorce/family problems
- addiction problems
- complained about inadequate pay
- excessve pressure from within the org
- refusal to take vacations
- past employment-related problems
- social isolation
- past legal problems
- complained about lack of authority
- excessive family/peer pressure for success
- other
- instability in life circumstances - Answer: Fraud red flags include:
ACFE Study - Answer: found that payroll schemes accounted for 9% of the asset
misappropriations, had a median cost of $62,000, and lasted a median of 2 years before being
detected
,- poor tone at the top
- dominating and intimidating personalities
- mistrust
- excessive team loyalty
- management doesnt want to hear about problems
- a lack of sound policies and procedures
- the perception that wrongdoing will not be addressed if misconduct is reported - Answer:
Factors that discourage the reporting of fraud according to report from anit-fraud collaboration
include:
- fear of the unknown
- fear that the report will not be handled anonymously or confidentially
- fear that the reporters identity will be revealed to other in the organization
- concern that the person perpetrating the misconduct will not be held responsible - Answer:
Factors that discourage employees from coming forward include:
- retaliation by coworkers
- termination
- future reputation
- impact on others
- results of investigation determine that the misconduct unsustainable
- emotional cost - Answer: What are the potential consequences for reporting suspected fraud?
FS Fraud - Answer: occurs when an employee, typically a member of top management, causes a
misstatement or omission of material in the organization's financial reports
recording ficticious revenues, understating reported expenses, artificially inflating reported
assets, failing to accrue expenses at the end of the year, and accelerating the recording of
, revenue into an earlier period (timing differences) - Answer: What are some examples of FS
fraud?
situational pressure, perceived opportunity, and rationalization - Answer: What are the
elements of the fraud triangle that explain why FS fraud occurs?
"how we do things around here" - Answer: What does the organizations culture represent?
"how we do things around here in relation to ethics and ethical behavior in the organization" -
Answer: What does the ethical culture represent?
Ethical Collapse (according to Marianne Jennings) - Answer: "occurs when any organization has
drifted from the basic principles of right and wrong"
Marianne Jennings - Answer: Who wrote "The 7 signs of Ethical Collapse"?
1) pressure to maintain numbers
2) fear and silence
3) young'uns and a bigger than life CEO (loyalty to the boss)
4) weak board of directors
5) conflicts of interest overlooked or unaddresses
6) innovation like no other company (sometimes too much)
7) goodness in the some areas atones for evil in others - Answer: What are the 7 signs of ethical
collapse?
Ethics Resource Center (ERC) - Answer: the oldest nonprofit advancing high ethical standards
and practices in public and private institutions
Review Comprehensive
Questions (Frequently Tested)
with Verified Answers Graded
A+
Fraud - Answer: a deliberate misrepresentation to gain an advantage over another party (or
have them do something they might not ordinarily do)
Fraud in the FS, the misappropriation of assets (theft) and subsequent cover up, and disclosure
fraud - Answer: What are the different forms of fraud?
Asset Misappropriatiion Schemes - Answer: when an employee steals or misuses resources,
such as charging personal expenses to the company card while traveling on business trips
Corruption Schemes - Answer: include misusing one's position or influence in an organization
for personal gain
a tip (43% reported) - Answer: What was the most common detection method reported in 2016
ACFE survey?
,termination (66%) - Answer: What was the most common disciplinary method taken in
occupational fraud cases was?
- living beyond means (42%)
- financial difficulties (26%)
- unusually close association with vendor/customer
- control issues, unwillingness to share duties
- no behavioral red flags
- "wheeler-dealer" attitude
- irritability, suspiciousness, or defensiveness
- divorce/family problems
- addiction problems
- complained about inadequate pay
- excessve pressure from within the org
- refusal to take vacations
- past employment-related problems
- social isolation
- past legal problems
- complained about lack of authority
- excessive family/peer pressure for success
- other
- instability in life circumstances - Answer: Fraud red flags include:
ACFE Study - Answer: found that payroll schemes accounted for 9% of the asset
misappropriations, had a median cost of $62,000, and lasted a median of 2 years before being
detected
,- poor tone at the top
- dominating and intimidating personalities
- mistrust
- excessive team loyalty
- management doesnt want to hear about problems
- a lack of sound policies and procedures
- the perception that wrongdoing will not be addressed if misconduct is reported - Answer:
Factors that discourage the reporting of fraud according to report from anit-fraud collaboration
include:
- fear of the unknown
- fear that the report will not be handled anonymously or confidentially
- fear that the reporters identity will be revealed to other in the organization
- concern that the person perpetrating the misconduct will not be held responsible - Answer:
Factors that discourage employees from coming forward include:
- retaliation by coworkers
- termination
- future reputation
- impact on others
- results of investigation determine that the misconduct unsustainable
- emotional cost - Answer: What are the potential consequences for reporting suspected fraud?
FS Fraud - Answer: occurs when an employee, typically a member of top management, causes a
misstatement or omission of material in the organization's financial reports
recording ficticious revenues, understating reported expenses, artificially inflating reported
assets, failing to accrue expenses at the end of the year, and accelerating the recording of
, revenue into an earlier period (timing differences) - Answer: What are some examples of FS
fraud?
situational pressure, perceived opportunity, and rationalization - Answer: What are the
elements of the fraud triangle that explain why FS fraud occurs?
"how we do things around here" - Answer: What does the organizations culture represent?
"how we do things around here in relation to ethics and ethical behavior in the organization" -
Answer: What does the ethical culture represent?
Ethical Collapse (according to Marianne Jennings) - Answer: "occurs when any organization has
drifted from the basic principles of right and wrong"
Marianne Jennings - Answer: Who wrote "The 7 signs of Ethical Collapse"?
1) pressure to maintain numbers
2) fear and silence
3) young'uns and a bigger than life CEO (loyalty to the boss)
4) weak board of directors
5) conflicts of interest overlooked or unaddresses
6) innovation like no other company (sometimes too much)
7) goodness in the some areas atones for evil in others - Answer: What are the 7 signs of ethical
collapse?
Ethics Resource Center (ERC) - Answer: the oldest nonprofit advancing high ethical standards
and practices in public and private institutions
