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Fraud ACFI 840 Chapters 1-8 questions well answered to pass
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Fraud ACFI 840 Chapters 1-8 questions well answered to pass
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Fraud ACFI 840 Chapters 1-8Fraud Examination - correct answer ✔✔a process of resolving allegations of fraud from inception, to
disposition. It involves not only financial analysis, but also taking statements, interviewing witnesses,
writing reports, testifying to findings, and assisting in the detection and prevention of fraud.
Fraud Examination Methodology - correct answer ✔✔Requires that all fraud allegations be handled in a
uniform, legal fashion, and that they be resolved in a timely manner.
Auditing vs Fraud Examination - correct answer ✔✔Recurring vs nonrecurring, general examination
rather than specific search for fraud, issue opinion instead of affix blame (adversarial), professional
skepticism vs proof of fraud.
Predication - correct answer ✔✔is the totality of circumstances that would lead a reasonable,
professionally trained, prudent individual to believe that a fraud has occurred, is occurring, or will occur.
For example, a tip that something is going wrong from an employee.
Fraud Theory Approach - correct answer ✔✔the methodology used to investigate allegations of fraud. It
involves developing a theory based on a worst-case scenario of what fraud scheme could have occurred,
then testing the theory to see if it is correct. It involves the following sequence of steps: (1) Analyze
available data, (2) create a hypothesis, (3) test the hypothesis, and (4) refine and amend the hypothesis.
Occupational Fraud - correct answer ✔✔the use of one's occupation for personal enrichment through
deliberate misuse or misapplication of the employing organization's resources or assets. The key is that
the activity is (1) clandestine, (2) violates the employee's fiduciary duties to the organization, (3) is
committed for the purpose of direct or indirect financial benefit to the employee, and (4) costs the
employing organization assets, revenues, or reserves.
4 Elements of Fraud - correct answer ✔✔(1) The employee made a material false statement, (2) the
employee had knowledge that the statement was false when it was spoken, (3) the company relied on
the false statement, and (4) the company has suffered damages.
, Fraud - correct answer ✔✔encompasses any crime for gain that uses deception as its principal modus
operandi. Asset misappropriation (lowest $ loss/highest frequency), corruption and financial statement
fraud (highest $ loss/ lowest frequency).
Abuse - correct answer ✔✔petty crimes committed against organizations, such as taking excessively long
lunch hours or breaks, coming to work late or leaving early, using sick time when not sick, and pilfering
supplies or products. Misconduct, causing lost dollars or resources but not constituting fraud.
Conversion - correct answer ✔✔the unauthorized assumption of a right of ownership over the goods of
another to the exclusion of the owner's rights. When an employee steals company assets, he is
converting the use of them. Example, stealing an asset and bringing it back.
Larceny - correct answer ✔✔the unlawful taking and carrying away of property of another with the
intent to convert it to one's own use. In order to prove that a person has committed larceny, we would
need to prove the following four elements: (1) There was a taking or carrying away (2) of the money or
property of another (3) without the consent of the owner and (4) with the intent to deprive the owner of
its use or possession. Example, stealing an asset and not returning it.
Embezzle - correct answer ✔✔willfully to take, or convert to one's own use, another's money or
property of which the wrongdoer acquired possession lawfully, by reason of some office or employment
or position of trust. The person who stole the property must have been entitled to possession of the
property at the time of the theft. Remember, "possession" is not the same thing as "ownership."
Fraud triangle - correct answer ✔✔Developed by Cressey. Three factors must be present: opportunity,
pressure, rationalization. non-shareable financial problems create motive.
The Legal Definition of Fraud - correct answer ✔✔is the same whether the offense is criminal or civil; the
difference is that criminal cases must meet a higher burden of proof.
White Collar Crime - correct answer ✔✔coined by Edwin Sutherland, originally defined as criminal acts
only of corporations and of individuals acting in their corporate capacity (e.g., management fraud or
crime), but now used to define almost any financial or economic crime.
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