(Multiple Choice)
1. The most effective way to reduce losses from fraud is:
a. Detecting fraud early.
b. Implementing proactive fraud detection programs.
c. Preventing fraud from occurring.
d. Severely punishing fraud perpetrators.

2. To successfully prevent fraud, an organization must:
a. Identify internal control weaknesses.
b. Explicitly consider fraud risks.
c. Take proactive steps to create the right kind of environment.
d. All of the above.

3. The best way for management to model appropriate behavior is to:
a. Enforce a strict code of ethics.
b. Set an example of appropriate behavior.
c. Train employees about appropriate behavior.
d. Make employees read and sign a code of conduct.

4. Which of the following is not a proactive way for a company to eliminate fraud opportunities?
a. Severely punishing fraud perpetrators.
b. Assessing risks.
c. Implementing appropriate preventive and detective controls.
d. Creating widespread monitoring of employees.

5. Most frauds start small and:
a. If not detected, continue to get larger.
b. Usually decrease in amount.
c. Remain steady and consistent.
d. None of the above.

6. It is most difficult to prevent which type of fraud?
a. Investment scams.
b. Fraud committed by a company president.
c. Employee fraud.
d. Customer fraud.

7. Which of the following refers to the circumstances, taken as a whole, that would lead a reasonable prudent professional to believe fraud has occurred, is occurring, or will occur?
a. Evidential circumstance.
b. Investigation.
c. Service of process.
d. Predication.

8. An investigative approach that includes testimonial evidence, documentary evidence, physical evidence, and personal observations is referred to as the:
a. Investigative square of evidence.
b. Investigation square.
c. Evidence square.
d. Fraud triangle plus.