Chapter 1: Occupational Fraud Overview

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Questions and Answers

What is one of the key objectives after studying this chapter?

  • Understand the seriousness of fraud and its impact (correct)
  • Understand the technicalities of civil fraud laws
  • Learn about different types of fraud in detail
  • Memorize statistical figures related to fraud

Where do statistics on the prevalence and cost of fraud come from?

  • Non-profit organizations, regulatory bodies, forensic accounting firms, consulting firms
  • Private corporations, law enforcement agencies, academic institutions, financial institutions
  • Government agencies, researchers, insurance companies, victims of fraud (correct)
  • Media reports, public surveys, internal audits, external audits

What is the main difference between fraud committed against an organization and fraud committed on behalf of an organization?

  • The involvement of external agencies in the investigation
  • The amount of financial loss incurred by the organization
  • The legal consequences for the organization
  • The intent of the perpetrator (correct)

Which group is NOT a typical source of statistics on fraud occurrences?

<p>Academic institutions (B)</p> Signup and view all the answers

What is a key aspect covered in this chapter regarding fraud-fighting careers?

<p>The different career paths available in fighting fraud (D)</p> Signup and view all the answers

Which statement best describes the focus of this chapter?

<p>Understanding the impact and types of fraud (C)</p> Signup and view all the answers

What did Ponzi promise to investors in his scheme?

<p>Double your money in 90 days (C)</p> Signup and view all the answers

What was the single most critical element for fraud to be successful?

<p>Confidence (B)</p> Signup and view all the answers

What does the word 'con' mean based on the text?

<p>To deceive (C)</p> Signup and view all the answers

Why was Ponzi able to gain investors' confidence in his scheme?

<p>By paying high returns consistently (D)</p> Signup and view all the answers

What was one of the key components of Ponzi's scheme according to the text?

<p>Paying returns to original investors (C)</p> Signup and view all the answers

What aspect of Ponzi's scam is considered extremely helpful in understanding fraud?

<p>Deception and confidence (B)</p> Signup and view all the answers

What is an example of customer fraud involving a bank in Chicago?

<p>Customers deceiving organizations into giving them something they should not have (B)</p> Signup and view all the answers

Which type of fraud involves top management deceptively misstating financial statements?

<p>Financial statement fraud (A)</p> Signup and view all the answers

What kind of fraud includes selling fraudulent investments to unsuspecting investors?

<p>Ponzi schemes (A)</p> Signup and view all the answers

Which of the following is NOT an example of financial statement fraud?

<p>Telemarketing fraud (B)</p> Signup and view all the answers

In which type of fraud do customers get something for nothing?

<p>Financial statement fraud (D)</p> Signup and view all the answers

What is a common characteristic of fraud involving Nigerian letter or money scams?

<p>Misleading individuals through false promises (C)</p> Signup and view all the answers

What are the two common forms of fraud perpetrated by vendors?

<p>Shipment of inferior goods and nonshipment of goods (B)</p> Signup and view all the answers

In direct occupational fraud, what is an example of direct theft of company assets?

<p>Stealing company cash (D)</p> Signup and view all the answers

What type of fraud involves employee collusion with vendors or buyers for illicit gains?

<p>Indirect fraud (D)</p> Signup and view all the answers

Which scenario represents indirect occupational fraud?

<p>Employee receives bribes from vendors for higher purchase prices (B)</p> Signup and view all the answers

What is a common outcome of fraud perpetrated through collusion between buyers and vendors?

<p>Overcharge for purchased goods (C)</p> Signup and view all the answers

Which company is provided as an example of direct fraud in the text?

<p>CVC Construction (B)</p> Signup and view all the answers

What skills are considered important for a fraud examiner according to the text?

<p>Analytical skills and technological skills (A)</p> Signup and view all the answers

Which of the following is NOT a requirement to become a Certified Fraud Examiner (CFE)?

<p>Having a bachelor's degree (C)</p> Signup and view all the answers

In addition to academic and professional qualifications, what other criteria must be met to become a Certified Fraud Examiner (CFE)?

<p>Being of high moral character (B)</p> Signup and view all the answers

What is a key focus area related to human behavior that fraud examiners should understand?

<p>Why people rationalize dishonesty (B)</p> Signup and view all the answers

Which group provides the opportunity to become a Certified Fraud Examiner (CFE)?

<p>Association of Certified Examiners (ACFE) (B)</p> Signup and view all the answers

What is typically the minimum academic requirement for applicants seeking CFE certification?

<p>Bachelor's degree or equivalent (A)</p> Signup and view all the answers

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