(Multiple Choice)
1. The most common account(s) manipulated when perpetrating financial statement fraud are:
a. Expenses.
b. Inventory.
c. Revenues.
d. Accounts Payable.

2. Why might a company want to understate net income?
a. To increase profits.
b. To increase stock price.
c. To gain consumer confidence.
d. To pay less taxes.

3. Reported revenue and sales account balances that appear too high are examples of:
a. Analytical symptoms.
b. Documentary symptoms.
c. Lifestyle symptoms.
d. Verbal symptoms.

4. Horizontal analysis is a method that:
a. Examines financial statement numbers from period to period.
b. Examines percent changes in account balances from period to period.
c. Examines transactions from period to period.
d. None of the above.

5. Recording fictitious receivables will usually result in a(n):
a. Sales return percentage that remains constant.
b. Increased sales discount percentage.
c. Increase in accounts receivable turnover.
d. Increase in the number of days in receivables.

6. Comparing recorded amounts in the financial statements with the real-world assets they are supposed to represent would be most effective in detecting:
a. Cash and inventory fraud.
b. Accounts payable fraud.
c. Revenue-related fraud.
d. Accounts receivable fraud.

7. Lifestyle symptoms are most effective with:
a. Revenue-related financial statement frauds.
b. Inventory-related financial statement frauds.
c. Employee frauds.
d. Accounts payable financial statement frauds.

8. Which of the following is not an inventory-related documentary symptom?
a. Duplicate purchase orders.
b. Missing inventory during inventory counts.
c. Unsupported inventory sales transactions.
d. All of the above are inventory-related documentary symptoms.