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Questions and Answers 2026
Recurring vs. Non Recurring General vs. Specific Opinion vs. Affix blame Non Adversarial vs. Adversarial Professional Skepticism vs. Proof - correct answer ✅Audit vs. Fraud Examination Timing? Scope? Objective? Relationship? Presumption? predication - correct answer ✅The totality of circumstances that would lead a reasonable, professionally trained, and prudent individual to believe a fraud has occurred, is occurring, and/or will occur. Fraud theory approach - correct answer ✅1. Analyze available data
- Create a hypothesis
Questions and Answers 2026
- Test the hypothesis
- Refine and amend the hypothesis Occupational fraud and abuse - correct answer ✅The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets surfing internet while at work, take care of personal business at work, taking a long lunch break, coming to work late/leaving early, working slow, working under the influence of drugs or alcohol - correct answer ✅What are a couple examples of workplace abuse? Occupational Fraud - correct answer ✅Comes in three forms:
- Corruption
- Asset Misappropriation (most common)
- Fraudulent Statements (most costly)
Questions and Answers 2026
taking of property and preventing owner from benefits of the property Embezzlement - correct answer ✅type of asset misappropriation use position of trust to steal from employer Edward Sutherland - correct answer ✅Who coined the term "White Collar Crime"? Differential association - correct answer ✅learn from people around you opportunity, pressure, rationalization - correct answer ✅What are the elements of the Fraud Triangle? Examples of pressures to commit fraud - correct answer ✅- Violation of ascribed obligations
- Problems arising from personal failure
Questions and Answers 2026
- Business reversals
- Physical isolation
- Status-gaining
- Employer-employee relations
- Independent businessmen
- Long-term violators
- Absconders (one-time offenders) - correct answer ✅Types of trust violators? job satisfaction - correct answer ✅Employee deviance is primarily caused by what? Tip - correct answer ✅Most common way frauds are initially detected? Skimming - correct answer ✅theft of cash from a victim entity prior to its entry into an accounting system; "off-book"
Questions and Answers 2026
difficult to detect than sales skimming, because the receivables are already recorded on the victim organization's books. In other words, the incoming payments are expected by the victim organization. The key to a receivables skimming scheme is to conceal either that the payment was stolen or that the payment was due. Ex. Lapping, Force balancing, stolen/counterfeit statements, fraudulent write-offs or discounts, debiting the wrong account, or destroying/altering records Lapping - correct answer ✅- type of receivables skimming
- Crediting one customer's account with payment received from another customer
- Keeping track of payments becomes complicated
- Second set of books is sometimes kept Force balancing - correct answer ✅- type of receivables skimming
Questions and Answers 2026
- Posting to the customer's account without depositing the check creates an imbalance condition
- Cash account is overstated so the amount skimmed must be forced in order to balance the account Fraudulent write-offs or discounts - correct answer ✅- type of receivables skimming -Write off the account as bad debt -Post entries to a contra revenue account (discounts and allowances) Debiting the wrong account - correct answer ✅- type of receivables skimming -Debit an existing or fictitious A/R -Wait for the A/R to age and be written off Destroying or altering records of the transaction - correct answer ✅- type of receivables skimming -Often a last ditch effort to conceal the fraud -Makes it more difficult to prove the fraud
Questions and Answers 2026
-Results in an imbalance between the register tape and cash drawer
- Different from skimming b/c sale and receipt of cash is recorded, BUT cash is stolen Concealing larceny schemes - correct answer ✅- Theft from other registers
- Death by a thousand cuts (steal small amounts over prolonged period of time)
- Reversing transactions (false voids/refunds)
- Altering cash counts or register tapes
- Destroying register tapes
- Separation of duties (making sales vs. doing refunds)
- Independent checks over the receipting and recording of incoming cash
- Upon reconciliation of cash register tape, cash should go directly to cashier's office
- Check discrepancies, especially if pattern
- Periodically run reports by employee, department and location -
Questions and Answers 2026
correct answer ✅Ways to prevent and detect cash larceny at the point of sale? Larceny of receivables - correct answer ✅Theft occurs after the payment has been recorded Concealing larceny of receivables - correct answer ✅- Force balancing
- Reversing entries
- Destruction of records Cash larceny from the deposit - correct answer ✅-Whoever takes the deposit to the bank has an opportunity to steal a portion of it -Having controls—such as matching the receipted deposit slip to the originally prepared slip—does not always prevent theft -Failure to reconcile the slips can foster an environment leading to theft -Lack of security over the deposit before it goes to the bank can also lead to theft
