Planning And Conducting A Fraud Examination Flashcards
To preserve the confidentiality of a fraud investigation by ensuring that it is afforded protection under a legal professional privilege, a government official should direct or supervise the investigation.
A. True
B. False
False
Which of the following terms is defined as the totality of circumstances that would lead a reasonable, professionally trained, and prudent individual to believe a fraud has occurred, is occurring, or will occur?
A. Suspicion
B. Predication
C. Declaration
D. Fraud theory
B. Predication
Which of the following is the LEAST APPROPRIATE participant on a team assembled to investigate fraud?
A. Suspect’s supervisor
B. Legal counsel
C. Auditor
D. Industry specialist
A. Suspect’s supervisor
A fraud response plan details the actions an organization will take when suspicions of fraud arise.
A. True
B. False
True
Which of the following is a recommended procedure for protecting a fraud investigation’s case information?
A. Avoid talking about the investigation in public or in any place where other employees can hear the communications
B. Store all confidential documents in locked file cabinets or rooms accessible only to those who have a need to know
C. Avoid using email or other electronic means to transmit confidential case information
D. All of the above
D. All of the above
When evidence of fraud arises, management generally should respond by:
A. Conducting an initial assessment
B. Preserving relevant documents
C. Identifying who should be informed
D. All of the above
D. All of the above
Carter, a Certified Fraud Examiner (CFE) for Universal Design, learns that Wendi, a shrewd salesperson with a reputation for bending or ignoring rules, has close relationships with several Universal Design customers. Carter also knows that Wendi has excessive gambling habits. Carter has sufficient predication to:
A. Accuse Wendi directly of having committed fraud.
B. Alert management that Wendi might have committed fraud.
C. Conduct discreet inquiries about Wendi’s work as a salesperson.
D. Check Wendi’s phone, computer, and messages for evidence of wrongdoing.
C. Conduct discreet inquiries about Wendi’s work as a salesperson.
Which of the following statements about how fraud examiners should approach fraud examinations is CORRECT?
A. Fraud examinations should begin with general information that is known and then transition to details that are more specific
B. In most examinations, fraud examiners should interview the suspect before any other possible interview candidates
C. Individuals who appear to be more involved in the fraud scheme should be interviewed at the beginning of the investigation
D. All of the above
A. Fraud examinations should begin with general information that is known and then transition to details that are more specific
To preserve the confidentiality of a fraud investigation, management should always implement a policy prohibiting all employees from discussing anything related to employee investigations.
A. True
B. False
False
In general, the subject of an investigation should be interviewed first.
A. True
B. False
False
Which of the following BEST describes predication?
A. The initial phase of an interview
B. The initial phase of the investigative process
C. The basis upon which a fraud examination is undertaken
D. The means by which individuals justify their unethical actions
C. The basis upon which a fraud examination is undertaken
Which of the following is NOT part of the fraud examination process?
A. Determining whether the subject is guilty or innocent
B. Writing reports
C. Assisting in the detection and prevention of fraud
D. Testifying to findings
A. Determining whether the subject is guilty or innocent
To properly prepare an organization for a formal fraud investigation, all employees should be notified of the investigation’s existence and purpose.
A. True
B. False
False
Which of the following is INCORRECT regarding fraud response plans?
A. A fraud response plan should be complex and extremely detailed to ensure its effectiveness.
B. A fraud response plan should create an environment that minimizes risk and maximizes the potential for success.
C. A fraud response plan should take both previous fraud cases and industry-related risks into consideration.
D. A fraud response plan should be flexible and allow appropriate responses based on the particular event.
A. A fraud response plan should be complex and extremely detailed to ensure its effectiveness.
When conducting fraud examinations, fraud examiners should follow the fraud theory approach.
A. True
B. False
True
