Deck 8: The Evidence Collection Process

Question 1

What is the fraud investigators primary responsibility?

A) Collecting basic evidence
B) Proving that fraud exists
C) Providing reverse proof
D) Liaising with law enforcement

Answer 1

A

Question 2

When declaring guilt or innocence, the Certified Fraud Examiner Code of Ethics states:

A) A fraud examiner must conclusively prove guilt or innocence in all cases of alleged fraud.
B) No opinion shall be expressed regarding the guilt or innocence of any person or party.
C) Guilt or innocence will be determined in conjunction with the wishes of the corporation investigating the fraud.
D) The Certified Fraud Examiner Code of Ethics are intentionally silent on this topic.

Answer 2

B

Question 3

The evidence collection process begins with:

A) Routine observations of accounting processes.
B) Interviews with those furthest away from the fraud.
C) A review of the physical and document evidence.
D) Wherever the investigator feels is most important.

Answer 3

C

Question 4

Which of the following is an example of observation evidence?

A) Printed cash receipts
B) Surveillance tape of an employee putting money in their pockets.
C) Expert testimony regarding financial statements.
D) All of the above

Question 5

Evidence can be:

A) Only tangible objects
B) Anything
C) Documents
D) Testimony

Question 6

Fraud theory is:

A) Fraudster, circumstances, motive and opportunity
B) The details surrounding crime and punishment
C) Where, why, with whom, opportunity and fraud
D) Who, what, when, where, why, how

Question 7

To whom does the theory of fraud development lie?

A) The fraud investigator
B) Law enforcement
C) The corporation
D) The attorney

Question 8

The risk of making less-than-optimal decisions in deciding what evidence to collect, and how to collect it, and how to interpret it is called:

A) Opportunity risk
B) Fraud risk
C) Investigation risk
D) Loss risk

Question 9

The "where" of a fraud scheme are:

A) The possible locations of the fraud.
B) The general functional area or position.
C) The conditions present to commit the fraud.
D) The mechanisms of the fraud.

Question 10

A fraud hypothesis:

A) Can never be changed unless a new engagement letter is published.
B) Should be changed after conviction to match the crime involved.
C) Is simply a hypothesis and can be changed, or modified as more facts are discovered.
D) Is a standard of defense and should be proven wrong before the case is finalized.

Question 11

A complete court case typically includes:

A) All of these
B) A fraud theory
C) Collected evidence
D) Expert testimony

Question 12

Document Evidence may include:

A) Working papers
B) Computer files
C) Charts and graphs
D) All of the above

Question 13

Predication dictates that there must be:

A) A reasonable justification for each step in the evidence collection process.
B) A physical justification for each step in the evidence collection process.
C) A reasonable justification for each step in the interviewing process.
D) A reasonable justification for each step in the documentation process.

Question 14

The "how" of a fraud scheme are:

A) The possible locations of the fraud.
B) The general functional area or position.
C) The conditions present to commit the fraud.
D) The mechanisms of the fraud.

Question 15

When are interviews conducted?

A) After a fraud theory is formed.
B) After careful review of documents.
C) Once a fraud scheme is defined.
D) All of the above

Question 16

In which order are interviews typically conducted?

A) From the suspect out toward those remotely familiar with the suspect.
B) From farthest away from the suspect back towards the suspect.
C) As personnel become available.
D) Alphabetically by last name.

Question 17

The objective of the physical and document review phase is:

A) To build an appropriately sized case file.
B) To become as familiar as possible with the relevant business processes and individuals involved.
C) To assist in preparation of the engagement letter.
D) All of the above.

Question 18

The "who" of a fraud scheme are:

A) The possible locations of the fraud.
B) The general functional area or position.
C) The conditions present to commit the fraud.
D) The mechanisms of the fraud.

Question 19

Which of the following is a reason not to initially confront the fraudster prior to beginning an investigation?

A) It is illegal to confront a fraudster without a court order.
B) You never know who the fraudster is without an investigation.
C) Catching them in the act through observation can lead to quicker convictions or plea bargains.
D) All of the above.

Question 20

An experts opinion can be combined with evidence to provide a(n):

A) Conviction
B) Arrest Warrant
C) Loss claim
D) Picture of fraud

Question 21

Describe what is contained in a complete court case.

Question 22

Explain and give examples of the use of a fraud theory.

Question 23

Investigation risk is the risk of

A) The possibility of retaliation by the fraudster.
B) The additional loss that will not be mitigated by performing an investigation.
C) The loss of income through having to pay an investigator.
D) Making less-than-optimal decisions in deciding what evidence to collect.

Question 24

Predication may also mean:

A) Previous accusations against the fraudster.
B) Follow the evidence.
C) Warning signs that should have been seen.
D) All of the above.

Question 25

The "why" of a fraud scheme is:

A) A disgruntled employee.
B) An employee with a gambling addiction.
C) A person living beyond their means.
D) All of the above

Question 26

Why would an investigator inverview the prime suspect last in the interview process?

Question 27

The "when" of a fraud scheme are:

A) The conditions present to commit the fraud.
B) The general functional area or position.
C) The possible locations of the fraud.
D) The mechanisms of the fraud.

Question 28

Explain the elements of a fraud scheme and describe the who, what, how when where and why of the investigation.

Question 29

What are the four types of evidence; explain each one.

Question 30

The "what" of a fraud scheme is:

A) The possible locations of the fraud.
B) The general functional area or position.
C) The conditions present to commit the fraud.
D) The classification of the fraud.

Question 31

Who's responsibility is it to establish a fraud theory and provide an example of one.

Question 32

Almost all ongoing frauds schemes, no matter how sophisticated, have one weakness in common:

A) The perpetrator is subject to being caught in the act.
B) The fraud can be detected through financial statement analysis.
C) The burden of proof is on the fraudster.
D) Law enforcement can arrest the fraudster at anytime.

Question 33

If you are testing a piece of evidence to determine if it is consistent with the fraud case, you are performing a(n):

A) Hypothesis test
B) Investigation test
C) Litmus test
D) Hersey test

Question 34

Outline the steps in the evidence collection process
The evidence collection process begins with a review of the physical and document evidence. The process then proceeds to observations and interviews. Review the Physical and Document Evidence: Depending on the case, the review of the physical and document evidence may involve accounting records, application forms, credit reports, bank statements, tax returns, and so on. Observation There's nothing better than catching a fraudster in the act. Moreover, in some types of frauds, it is frequently the only way to catch and convict a fraudster.
Interviews: Interviews are conducted after the investigator has carefully studied all other kinds of evidence, and after the investigator has a fairly strong theory of the fraud scheme under consideration. The goal in interviewing is to obtain a confession if possible. If a confession is not possible, then the goal is to get the suspect on record in as much relevant detail as possible.

Question 35

There are no generally-accepted, published professional protocols available to guide fraud investigators in conducting investigations because:

A) The laws surrounding investigations of this type do not allow for protocols to be established.
B) The specific way in which a given investigation is conducted is determined by the objectives of the investigation.
C) GAAP provides suitable protocols.
D) The American Association of Fraud Examiners currently has protocols being validated by the U.S. District Court of Appeals.

Question 36

Why are there no published professional protocols available to guide fraud investigators in conducting investigations for each specific type of fraud scheme?

Question 37

What is the fraud theory approach and provide an example of using it.

Question 38

In the absence of any pre-established protocols within a company, a fraud examiner must:

A) Find case precedence from a previous fraud of similar scope and use their protocols.
B) Work with law enforcement to establish protocols.
C) Develop a set of protocols prior to the specific investigation they are working on.
D) All of the above

Question 39

Apply the fraud theory approach to evidence collection

Question 40

How many hypothesis are allowed during an investigation?

A) 1
B) 2
C) 3
D) As many as can be interrelated to the fraud.

Question 41

The fraud theory approach to fraud investigations is a process that posits a hypothesis regarding a fraud scheme, tests the hypothesis with evidence, and then accepts, modifies, or discards the hypothesis as is warranted by the evidence.

Question 42

The principle of predication dictates that there must be a reasonable justification for each step in the evidence collection process.

Question 43

An investigator will work their fraud hypothesis until it is proven.

Question 44

Investigation risk is the risk of making less-than-optimal decisions in deciding what evidence to collect, and how to collect it, and how to interpret it.

Question 45

It is possible to have multiple hypotheses' that relate to the same fraud.
True

Question 46

Computer files are not considered document evidence because they do not exist physically.

Question 47

Predication dictates that there must be a reasonable justification for each step in the evidence collection process.

Question 48

The "how" of a fraud investigation are the conditions surrounding the fraud.

Question 49

The fraud scheme must answer the question "why" before charges can be filed.

Question 50

The investigator should start with the suspect first, then interview outward.