1. When a fraudster concludes that his or her fraudulent act is justified because of some prior action by the victim that caused harm to the fraudster, this is called:
a. Conceptualization
b. Remediation
c. Retribution
d. Rationalization

2. All of the following are among the top five personal characteristic “ red flags” of fraud except:
a. A deep- seeded desire for revenge
b. Feeling of being underpaid
c. Living beyond one’s means
d. Undue family and peer pressure

3. All of the following are among the top five organizational characteristic “red flags” of fraud except:
a. No clear lines of authority
b. No separation of duties between accounting functions
c. Placing too much trust in key employees
d. An autocratic leadership style

4. The most common type of financial statement fraud is:
a. Capitalizing expenses
b. Deferring goodwill write- offs
c. Overstatement of revenues
d. Manipulation of ending inventory

5. The fraud diamond adds which of the following elements to the fraud triangle?
a. Capability
b. Sensibility
c. Accountability
d. All of the above

6. When an attorney argues that “Even if my client was motivated and had the opportunity to commit the crime, he does not have the capability to carry it out,” this is known as what type of defense?
a. Rationalization defense
b. Knucklehead defense
c. Appeal to the compassion of the jury
d. None of the above

7. In the fraud scale, the fraud triangle is modified by re-moving rationalization and replacing it with:
a. Balance
b. Behavioral consistency
c. Integrity
d. Mediation

8. According to economic theory, what motivates an individual to commit fraud?
a. Fear
b. Coercion
c. Peer pressure
d. Self interest

9. Which of the following is not a component of the formula for the calculus of fraud?
a. Perceived gravity of the loss
b. Reward
c. Impact on the victim
d. Probability of getting caught

  • CreatedMarch 04, 2015
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