Question 1

The fraud triangle represents a geographic area in Southeast Asia where international fraud is prevalent.

Accepted Answer

A) True 
 B)False

Question 2

Explain the characteristics of management fraud.

Accepted Answer

Management fraud typically occurs at lev...

Question 3

Who is responsible for establishing and maintaining the internal control system?

Accepted Answer

A)   the internal auditor
B)   the accountant
C)   management
D)   the external auditor

Question 4

Use the internal control procedures listed below to complete the statements.
 
-Not permitting the computer programmer to enter the computer room is an example of _______________________________.

Accepted Answer

segregatio...

Question 5

All of the following are conditions for fraud except

Accepted Answer

A)   false representation
B)   injury or loss
C)   intent
D)   material reliance

Question 6

Which ethical principle states that the benefit from a decision must outweigh the risks,and that there is no alternative decision that provides the same or greater benefit with less risk?

Accepted Answer

A)   minimize risk
B)   justice
C)   informed consent
D)   proportionality

Question 7

Which of the following is the best reason to separate duties in a manual system?

Accepted Answer

A)   to avoid collusion between the programmer and the computer operator
B)   to ensure that supervision is not required
C)   to prevent the record keeper from authorizing transactions
D)   to enable the firm to function more efficiently

Question 8

Defalcation is another word for financial fraud.

Accepted Answer

A) True 
 B)False

Question 9

Cash larceny involves

Accepted Answer

A)   stealing cash from an organization before it is recorded
B)   stealing cash from an organization after it has been recorded
C)   manufacturing false purchase orders, receiving reports, and invoices
D)   A clerk pays a vendor twice for the same products and cashes the reimbursement check issued by the vendor.

Question 10

The concept of reasonable assurance suggests that

Accepted Answer

A)   the cost of an internal control should be less than the benefit it provides
B)   a well-designed system of internal controls will detect all fraudulent activity
C)   the objectives achieved by an internal control system vary depending on the data processing method
D)   the effectiveness of internal controls is a function of the industry environment

Question 11

Four principal types of corruption are discussed.Name all four and explain at least two.

Accepted Answer

Corruption involves an executive,manager...

Question 12

Which of the following is not a limitation of the internal control system?

Accepted Answer

A)   errors are made due to employee fatigue
B)   fraud occurs because of collusion between two employees
C)   the industry is inherently risky
D)   management instructs the bookkeeper to make fraudulent journal entries C

Question 13

Distinguish between skimming and cash larceny.Give an example of each

Accepted Answer

Skimming involves stealing cash from an ...

Question 14

For an action to be called fraudulent,all of the following conditions are required except

Accepted Answer

A)   poor judgment
B)   false representation
C)   intent to deceive
D)   injury or loss

Question 15

Explain the purpose of the PCAOB

Accepted Answer

The PCAOB is empowered to set auditing,quality control,and ethics standards;to inspect registered accounting firms;to conduct investigations;and to take disciplinary actions.

Question 16

Since all fraud involves some form of financial misstatement,how is Fraudulent Statement fraud different?

Accepted Answer

Fraudulent statements are associated wit...

Question 17

Which of the following situations is not a segregation of duties violation?

Accepted Answer

A)   The treasurer has the authority to sign checks but gives the signature block to the assistant treasurer to run the check-signing machine.
B)   The warehouse clerk, who has the custodial responsibility over inventory in the warehouse, selects the vendor and authorizes purchases when inventories are low.
C)   The sales manager has the responsibility to approve credit and the authority to write off accounts.
D)   The department time clerk is given the undistributed payroll checks to mail to absent employees.
E)   The accounting clerk who shares the record keeping responsibility for the accounts receivable subsidiary ledger performs the monthly reconciliation of the subsidiary ledger and the control account. B

Question 18

In balancing the risks and benefits that are part of every ethical decision,managers receive guidance from each of the following except

Accepted Answer

A)   justice
B)   self interest
C)   risk minimization
D)   proportionality

Question 19

Use the internal control procedures listed below to complete the statements.
 
-Locking petty cash in a safe is an example of __________________________.

Accepted Answer

The answer of Use the internal control procedures listed below...

Question 20

The ethical principle of justice asserts that the benefits of the decision should be distributed fairly to those who share the risks.

Accepted Answer

A) True 
 B)False

Exam 3: Ethics, Fraud, and Internal Control

The fraud triangle represents a geographic area in Southeast Asia where international fraud is prevalent.

Correct AnswerverifiedShow Answer

Explain the characteristics of management fraud.

Correct AnswerverifiedManagement fraud typically occurs at lev...View AnswerShow Answer

Who is responsible for establishing and maintaining the internal control system?

Correct AnswerverifiedShow Answer

Use the internal control procedures listed below to complete the statements. -Not permitting the computer programmer to enter the computer room is an example of _______________________________.

Correct Answerverifiedsegregatio...View AnswerShow Answer

All of the following are conditions for fraud except

Correct AnswerverifiedShow Answer

Which ethical principle states that the benefit from a decision must outweigh the risks,and that there is no alternative decision that provides the same or greater benefit with less risk?

Correct AnswerverifiedShow Answer

Which of the following is the best reason to separate duties in a manual system?

Correct AnswerverifiedShow Answer

Defalcation is another word for financial fraud.

Correct AnswerverifiedShow Answer

Cash larceny involves

Correct AnswerverifiedShow Answer

The concept of reasonable assurance suggests that

Correct AnswerverifiedShow Answer

Four principal types of corruption are discussed.Name all four and explain at least two.

Correct AnswerverifiedCorruption involves an executive,manager...View AnswerShow Answer

Which of the following is not a limitation of the internal control system?

Correct AnswerverifiedC

Distinguish between skimming and cash larceny.Give an example of each

Correct AnswerverifiedSkimming involves stealing cash from an ...View AnswerShow Answer

For an action to be called fraudulent,all of the following conditions are required except

Correct AnswerverifiedShow Answer

Explain the purpose of the PCAOB

Correct AnswerverifiedThe PCAOB is empowered to set auditing,quality control,and ethics standards;to inspect registered accounting firms;to conduct investigations;and to take disciplinary actions.

Since all fraud involves some form of financial misstatement,how is Fraudulent Statement fraud different?

Correct AnswerverifiedFraudulent statements are associated wit...View AnswerShow Answer

Which of the following situations is not a segregation of duties violation?

Correct AnswerverifiedB

In balancing the risks and benefits that are part of every ethical decision,managers receive guidance from each of the following except

Correct AnswerverifiedShow Answer

Use the internal control procedures listed below to complete the statements. -Locking petty cash in a safe is an example of __________________________.

Correct AnswerverifiedShow Answer

The ethical principle of justice asserts that the benefits of the decision should be distributed fairly to those who share the risks.

Correct AnswerverifiedShow Answer

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Management fraud typically occurs at lev...
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segregatio...
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Corruption involves an executive,manager...
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C

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Skimming involves stealing cash from an ...
View Answer

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The PCAOB is empowered to set auditing,quality control,and ethics standards;to inspect registered accounting firms;to conduct investigations;and to take disciplinary actions.

Correct Answer
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Fraudulent statements are associated wit...
View Answer

Correct Answer
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B

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Correct Answer
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