ACCT 562 WEEK 4 MIDTERM EXAM
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ACCT 562 Week 4 Midterm Exam
ACCT562
ACCT 562 Week 4 Midterm Exam
Page: 1
1. Question: (TCO D) The review team should be aware of various management and operational techniques, which includes all of the following except:
1. Question: (TCO D) The review team should be aware of various management and operational techniques, which includes all of the following except:
1. Mental Models
2. Spirituality
3. Green
fielding
2. Question: (TCO F) Manually altering entries
in an organization‘s books in order to conceal fraud is called:
1. Shrinkage
2. Forced reconciliation
3. Padding the books
3. Question: (TCO F) During an interview, when
an interviewee repeatedly fiddles
with a pen or picks lint from her clothing, he/she is giving nonverbal clues called:
with a pen or picks lint from her clothing, he/she is giving nonverbal clues called:
1. Signals
2. Manipulators
3. Exemplifiers
4. Question: (TCO F) When the subject of an
investigation has been accused of misconduct, establishing a morally acceptable
rationalization might allow the accused to reconcile his actions with his
conscience. Which of the following is not an example of an acceptable
rationalization?
1. The accused felt that he needed to get back
at someone in the organization.
2. The accused engaged in the misconduct for
the benefit of others.
3. The accused has personal demons that can’t
be overcome.
5. Question: (TCO F) In one of the case
studies in the Wells textbook (page 49),
Brian Lee, a topnotch plastic surgeon, collected payments from
his patients without giving a cut to the clinic where he practiced. What was
his motivation for committing the fraud?
1. Repay his students loans.
2. Fund his charitable doctor work.
3. None of the above
6. Question: (TCO F) Nicolette Garrison works
part-time at an independent record store. Whenever her friend, Jacob Barker,
comes into the store during one of her shifts, he picks up a CD and brings it
to the register where Nicolette is stationed. After ringing a no sale
transaction on the cash register, Nicolette pretends to swipe Jacob’s credit
card for payment.
She puts the CD in a bag and gives it to Jacob, who walks out without actually paying for the merchandise. What kind of scheme is being committed?
She puts the CD in a bag and gives it to Jacob, who walks out without actually paying for the merchandise. What kind of scheme is being committed?
1. False refund
2. Sales skimming
3. Cash larceny
7. Question: (TCO F) Which of
the following is not a method used to conceal false shipments of inventory?
1. Falsely increasing the perpetual inventory
2. Writing off the inventory as scrap
3. Physical padding
8. Question : (TCO F) According to the
2009 Global Fraud Survey, the theft of which type of noncash asset was the
least common but caused the highest median loss?
1. Proprietary information
2. Securities
3. Inventory
9. Question: (TCO A) Benefits derived from
operational reviews include
1. assessing management information systems
2. locating opportunities to increase revenue
3. All of the above
10. Question: (TCO B) Financial ratios
used in planning include:
1. Performance
2. Profitability
3. All of the above
11. Question: (TCO AD) Creating staff
assignment, budgets, specific audit steps is part of the _____ phase.
1. Planning
2. Work program
3. Reporting
1. depreciation processes
2. inventoryraw material and finished goods
3. database access
13. Question: (TCO F) Richard Moore is
the controller for Ajax Company. Recently, he has suffered several large losses
at the race track, causing him to incur enormous personal debts. Which type of
non-sharable financial problem best describes Richard’s situation?
1. Physical isolation
2. Violation of ascribed obligations
3. Status gaining
14. Question: (TCO F) Research in the
Hollinger Clark study suggests that the best way to deter employee theft is by:
1. Increasing the perception of detection
2. Strengthening internal controls
3. Communicating the organization s fraud
policies to employees
15. Question: (TCO F) Which of the
following is not part of the fraud theory approach?
1. Develop what if scenarios.
2. Identify who committed the fraud.
16. Question: (TCO F) The technique for
analyzing the percentage change in individual financial statement items from
one accounting period to the next is known as:
1. Horizontal analysis
2. Vertical analysis
3. None of the above
17. Question: (TCO F) In the Fraud Tree,
asset misappropriations are broken down into cash and noncash schemes. Which
of the following is not considered a misappropriation of cash?
1. Skimming
2. Larceny
3. Fraudulent Disbursement
18. Question: (TCO A) _____ and
converting cash allow a business to survive.
1. Debt management
2. Employee satisfaction
3. None of the above
19. Question: (TCO F) Which of the
following is a method for concealing larceny of receivables?
1. Reversing entries
2. Lapping
3. Skimming
20. Question: (TCO F) Jeff Lewis is an
accounts receivable clerk for FTB Industries. As customers pay off their
balances, Lewis posts the payments but pockets the money. He can conceal his
theft by
1. Adjusting the account with a discount
2. Destroying the records
3. All of the above
21. Question: (TCO F) Which of the
following is a reason that a Chief Executive Officer might commit financial
statement fraud?
1. To avoid termination due to poor
performance
2. To conceal the company‘s true performance
3. All of the above
22. Question: (TCO B) Information
obtained during the course of planning includes:
1. Previous auditor credentials who worked in
this area.
2. Information from Motley Fool message
boards.
3. None of the above.
Page: 2
1. Question: (TCO A) Operational review
procedures embrace the concept of conducting
operations for economy, efficiency, and effectiveness. Provide a brief
description of the ECONOMY aspect, and provide an example.
operations for economy, efficiency, and effectiveness. Provide a brief
description of the ECONOMY aspect, and provide an example.
2. Question: (TCO F) The 2010 Report to the
Nations on Occupational Fraud and Abuse
covered a number of factors that are related to occupational fraud. List and
explain at least three of these factors.
covered a number of factors that are related to occupational fraud. List and
explain at least three of these factors.
3. Question:
(TCO F) Albrecht, in his research, developed
the “fraud scale” and furnished a list of the reasons employees and executives
commit occupational fraud. How are Albrecht’s conclusions similar to Cressey’s?
How are they different?
4. Question: (TCO F) How can fictitiousrevenue be created through the use of false salesto shell companies? Discuss the method and result of committing this fraud.
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