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Unit #4 Exam Fraud and Corporate Responsibility 1

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Unit #4 Exam Fraud and Corporate Responsibility 1.) Jackson, a Certified Fraud Examiner, discovered that the ABC Supply Company was not legally incorporated. To obtain information about the ownership of the company, Jackson should: a. Review fictitious business name/doing-business-as (DBA) information b. Contact the Better Business Bureau c. Review the UCC filings d. Review voter registration codes 2.) When an individual purchases real estate, they become a registrant in which of the following records? a. Real property records b. Voter registration records c. Public utility records d. UCC filing records 3.) Ray, a Certified Fraud Examiner, suspects that a local restaurant is being used as a front business for a criminal operation. Which of the following types of records would be LEAST likely to help Ray discover who owns the restaurant building? a. Voter registration codes b. Building permit records c. County fire marshal records d. Health department records 4.) If a fraud examiner is interested in obtaining the articles of incorporation filed by a company incorporated where the examiner resides, he generally should contact the: a. County clerk’s office b. Secretary of State’s office c. District court clerk’s office d. Attorney General’s office 5.) Which of the following situations would most likely require access to nonpublic records to develop evidence? a. Determining who owns a piece of real estate b. Finding out where a person lives c. Reviewing an individual’s personal cellphone records d. Obtaining a company’s articles of incorporation 6.) Baker, a government fraud examiner, is attempting to obtain information about a fraud suspect from a local bank. Which federal law governs access to the bank’s records? a. Freedom of Information Act b. Financial Institutions Records Act c. Fair and Accurate Credit Transactions d. Right to Financial Privacy Act 7.) Which of the following statements about the Fair Credit Reporting Act (FCRA) is FALSE? a. The FCRA applies even if the person or organization seeking the information gathers it directly from the source. b. The FCRA contains an exception for employers who gather consumer information in connection with a workplace investigation of misconduct. c. The FCRA applies to consumer reports bearing on a person’s character or general reputation. d. The FCRA applies to consumer reports bearing on a person’s mode of living 8.) Which of the following is a technique for reviewing relationships on an income statement by assigning net sales as 100 percent? a. Ratio analysis b. Current ratio c. Horizonal analysis d. Vertical analysis 9.) Which of the following calculations of receivable turnover is correct? e. Number of days in the year divided by receivables number f. Net sales on account divided by average inventory g. Cost of goods sold divided by average inventory h. Net income divided by net sales 10.) Nolan, a Certified Fraud Examiner, has been hired to perform analytical procedures on ABC Company. He is comparing the cost of goods sold for the years 2011-2016, inclusive, attempting to determine the trends in the cost of goods sold from one year to the next. This technique is called: i. Horizontal analysis j. Vertical analysis k. Ratio analysis l. Inventory turnover 11.) Green, a certified Fraud Examiner, is doing an analysis of the ABC Company’s 2016 financial statements. She has computed each item of expense for ABC and compared it to the total expense for the year. This type of analysis is called: m. Statistical analysis n. Horizontal analysis o. Vertical analysis p. Ratio analysis 12.) Norris, a Certified Fraud Examiner, is examining the working capital figures for the ABC Corporation. ABC has current assets of $2.5 million and currently liabilities of $1.25 million. What is ABC’s current ratio? q. 2:1 r. 1:4 s. 1:2 t. 2:4 13.) When introducing themselves, interviewers should generally ____________. a. Disclose that an investigation is being conducted b. Assume the subject is guilty c. Assume the subject will be deceptive d. Avoid using titles 14.) When conducting an interview of a witness, the interviewer should begin with: e. Open-ended questions that allow the witness to tell the story in his own way f. Specific questions designed to obtain all the information known by the witness g. General questions which keep the witness on the topic to be discussed during the interview h. Hypothetical questions designed to confuse the witness 15.) Which of the following is NOT one of the three elements of the most questions and informationseeking predicates? i. Content j. Rapport k. Form l. Timing 16.) Which of the following is the best-phrased question? m. “what do you know about the falsified expense reports?” n. “Did you ever approve suspect expense reports?” o. “Describe the expense report process.” p. “Why didn’t you tell anyone about the suspect expense reports?” Unit #7 Examination Chapter 17: Signed Statements 1.) In taking a signed statement, the interviewer should: a. Have the subject initial and date all pages other than the signature page b. Have the subject draw a line through all collections and have the interviewer initial and date them c. Allow the subject to use soft terms such as borrowed instead of steal if it helps the subject sign the statement d. Always have the statement notarized 2.) How many offenses should be included in a written statement? a. One b. Two c. Three d. None 3.) Which of the following is true of the statement “I didn’t mean to do this”? a. It diminishes legal responsibility b. It shows lack of cooperation c. It implies lack of intent d. It is a manipulator Chapter 18: Report Writing 1.) Opinions in a report might be acceptable under which of the following circumstances? a. The writer is conveying thoughts about a subject’s guilt or innocence. b. The writer is questioning the integrity or veracity of a witness c. The writer is a qualified expert and is opining about technical matters d. The writer is speculating about the motives of a witness 2.) If the subject confesses to stealing $5,000, how should this fact be phased in a fraud examination repot. a. “The subject stole $5,000” b. “the subject confessed, ‘I took the $5,000.’” c. “The subject is guilty of stealing $5,000.” d. “The subject is probably guilty of stealing $5,000.” 3.) Which of the following categories is NOT recommended for a report template? a. Name of preparer b. Date of report c. Details section d. Section entitled, “Guilty Parties” Discussion: Discuss a situation where you can conceive fraud. This could be a simple as buying a car or cheating in college. Then evaluate the case and render a decision. Did you make the right choice?