ACCT 562 Sample Multiple Choice Questions for Our Second Test graded A
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ACCT 562
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ACCT 562
ACCT 562 Sample Multiple Choice Questions for Our Second Test
ACCT 562 Sample Multiple Choice Questions for Our Second Test
ACCT 562 Sample Multiple Choice Questions for Our Second Test
acct 562 sample multiple choice questions for our second test
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ACCT 562
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ACCT 562 Sample Multiple Choice Questions for Our Second Test
87. The most common method of detecting occupational fraud is:
a. External auditors.
b. Internal auditors.
c. Accident.
d. Tips.
88. A company has a 22% profit margin and has employee fraud of $220,000. Calculate
the additional revenue needed to offset this lost income.
a. $540,000.
b. $720,000.
c. $820,000.
d. $1,000,000. ($220,000/.22)
90. Which is an incorrect statement?
a. Cash flow analysis may indicate fraud and embezzlement.
b. Cash is the favorite target of fraudsters.
c. Gross profit analysis may catch skimming and money laundering.
d. Theft is similar to embezzlement.
e. None of the above is incorrect.
91. Which technique is considered to be an "off-book" fraud?
a. Skimming.
b. Unrecorded sales.
c. Understated sales.
d. Theft of incoming checks.
e. All of the above.
92. Which scheme is considered to be skimming?
a. Unrecorded sales.
b. Understated sales.
c. Theft of incoming checks.
d. Swapping checks for cash.
e. All of the above.
93. Building up balances in bank accounts based upon floating checks drawn against
similar accounts in other banks is best called:
a. Skimming.
b. Kiting.
c. Money laundering.
d. Lapping.
e. None of the above.
,ACCT 562 Sample Multiple Choice Questions for Our Second Test
94. Skimming can be caught by:
a. Gross profit analysis.
b. Comparing receipts with deposits.
c. Surprise cash counts.
d. Investigating customers' complaints.
e. All of the above.
95. What is a red flag of kiting?
a. Frequent deposits and checks in the same amount.
b. Large deposits on Fridays.
c. Short time lag between deposits and withdrawals.
d. Only a and c.
e. Items a, b, and c.
96. What audit step would be most appropriate for finding accounts receivables fraud?
a. A bank reconciliation audit.
b. Gross profit analysis.
c. Reviewing customer complaints.
d. Surprise cash counts.
e. All of the above.
97. A person on the payroll who does not work for that company is generally called:
a. Lapping.
b. Ghost employee.
c. Missing employee.
d. Kiting.
e. None of the above.
108. Which of the following auditors is least interested in the materiality concept?
a. Forensic auditor.
b. Internal auditor.
c. External auditor.
d. GAO auditor.
e. All of the above.
110. Forensic accountants should compare travel and expense vouchers to employment
records and tax records in order to find:
a. Kiting schemes.
b. Lapping.
c. Layering schemes.
d. Ghost employees.
e. All of the above.
,ACCT 562 Sample Multiple Choice Questions for Our Second Test
111. You should trace bank transfers for the latter part of an audit period and the early part
of the subsequent period to determine whether:
a. The cash balances were overstated because of kiting.
b. The cash receipts journal was held open for a few days after the end of the year.
c. Any unusual payments to or receipts from related parties occurred.
d. The last checks recorded before the year-end were really mailed by year-end.
112. What audit procedures would not be highly effective for detecting fraud in the sales
and collection cycle?
a. Ascertain appropriate segregation of duties.
b. Review monthly bank reconciliations.
c. Verify accounts receivable balances.
d. Observe the actual distribution of payroll checks to employees.
113. What audit procedure would not be highly effective for detecting fraud in the payroll
cycle?
a. Verify accounts receivable balances by positive confirmations.
b. Observe the actual distribution of payroll checks to employees.
c. Sample personnel files and physically observe personnel.
d. Observe the duties of employees being performed.
116. Lapping is defined as:
a. Replacing new inventory with old.
b. Stealing a customer's payment and concealing the theft by applying subsequent
payments from other customers to the first customer's account.
c. Taking kickbacks.
d. False credits, discounts, and write-offs.
124. Which item would a forensic accountant go to first in order to investigate the source
of a suspicious transaction?
a. Budget.
b. Journal.
c. Cash register receipts.
d. Ledger.
e. Either a or b.
126. Misappropriation of inventory may be detected by one of the following:
a. Analyzing the year-end bank reconciliation for outstanding checks.
b. Calculating and analyzing the gross profit margin.
c. Reconciling the accounts receivable subsidiary ledger to the general ledger.
d. Increasing the integration of technology into the business process.
e. None of the above.
, ACCT 562 Sample Multiple Choice Questions for Our Second Test
127. requires keeping detailed records before and after the
period to determine the amount of fraud.
a. Tracing, entity.
b. Invigilation, invigilation.
c. Genogram, genogram.
d. Entity, entity.
e. Timeline, entity.
129. A chart is a pictorial display of personal relationships among related
or unrelated parties.
a. Link.
b. Invigilation.
c. Entity.
d. Genogram.
e. None of the above.
130. A fraud investigation should not be commenced without proper .
a. Conviction.
b. Predication.
c. Timing.
d. Motivation.
e. Some other event.
137. Which item would be a possible source document fraud symptom?
a. Cancelled check.
b. Out-of-balance entry.
c. Unexplained adjustment.
d. Entry by an unauthorized person.
e. None of the above are source documents.
138. Which item would not be considered a source document?
a. Sales invoice.
b. Shipping document.
c. Form 1099.
d. Out-of-balance account.
e. All of the above are source documents.
140. Which statement is false?
a. Illegally acquired funds are taxable even if victim is reimbursed by an
indemnity bond.
b. Money robbed from a bank is taxable.
c. Income is taxable at the same time the fraudster takes control of the funds.
d. A victim is allowed a fraud loss deduction in the year stolen.
e. None of the above is false.
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