Question 1

When employees avoid detection in a refund scheme to keep the sizes of the disbursement low, is referred to:

Accepted Answer

The term "small disbursements" refers to the strategy of keeping refund amounts low to avoid detection in fraudulent schemes.

Question 2

Which of the following search is used for unusually high incidence of returns and allowances scheme?

Accepted Answer

Returns and allowances are the specific account used to record returns and allowances received from customers. If there is an unusually high incidence of returns and allowances, it could indicate fraudulent activity or a problem with the company's products or services. Therefore, the search for an unusually high incidence of returns and allowances should focus on this account.

Question 3

One final means of concealing a register scheme, as with many kinds of fraud, is to destroy all records of the transaction.

Accepted Answer

This is true. By destroying all records of the transaction, there will be no evidence that a register scheme or any fraudulent activity occurred.

Question 4

Which of the following must be present for a fraud to exist?

Accepted Answer

All three elements - a material false statement, knowledge that the statement was false when it was made, and reliance on the false statement by the victim - must be present for a fraud to exist. Without any one of these elements, there can be no fraud.

Question 5

In physical tampering prevention technique, hidden images can be seen only when the check is held at an angle through:

Accepted Answer

The answer of In physical tampering prevention technique, hidden images...

Question 6

A technique by which checks are numbered using a new technique that is revealed by a colored highlighter pen or by a bright light held behind the check is called:

Accepted Answer

The answer of A technique by which checks are numbered...

Question 7

SIMULATION _________ is defined as a person who works for the victim organization and who is primary culprit

Accepted Answer

The answer of SIMULATION _________ is defined as a person...

Question 8

Bank cut-off statements should be requested for 10-15 days after the closing date of the balance sheet.

Accepted Answer

Bank cut-off statements are requested to ensure that all transactions are recorded in the correct period of the balance sheet. It is recommended to request them for 10-15 days after the closing date of the balance sheet to capture all relevant transactions.

Question 9

SIMULATION A ____________ can be very costly for an organization to undertake, both in terms of money and time spent.

Accepted Answer

The answer of SIMULATION A ____________ can be very costly...

Question 10

Bank statement are diligently reviewed to ensure that amounts and signature have not been altered, is an activity for:

Accepted Answer

Reviewing bank statements to ensure amounts and signatures have not been altered is a control activity related to preventing and detecting unauthorized or fraudulent disbursements, which falls under check disbursement controls.

Question 11

________, one of the Fraud synonyms implies that deceiving so thoroughly as to obscure the truth:

Accepted Answer

Delude implies a more intense level of deception than the other options, as it suggests not only leading someone to believe something false, but also persuading them to maintain that belief despite evidence to the contrary.

Question 12

Verify supporting documentation on outstanding checks written for a material amount is a test used to conduct for:

Accepted Answer

The answer of Verify supporting documentation on outstanding checks written...

Question 13

Which of the following is NOT the aspect of inventory purchase?

Accepted Answer

Inventory for year 2 being much greater than year 1 is not typically an aspect of inventory purchase; it suggests a change in inventory levels rather than a purchasing strategy or issue.

Question 14

___________ should be examined to see that all are properly documented and that inappropriate payments have not been made to employees.

Accepted Answer

Cash advances should be examined to ensure they are properly documented and that no inappropriate payments have been made to employees.

Question 15

Which check tampering red flag may indicate employees have embezzled cash and charged the embezzlement to expense accounts?

Accepted Answer

Missing checks may indicate that employees have embezzled cash and charged the embezzlement to expense accounts, as these checks could have been used to divert funds.

Question 16

Physical tampering prevention is a check tampering technique that is used to secure bank assisted controls.

Accepted Answer

Physical tampering prevention is not a check tampering technique; it refers to measures taken to prevent unauthorized physical access or alterations to checks or financial documents.

Question 17

The scheme in which the same vendor is receiving favorable treatment can be found in purchases by vendor searches.

Accepted Answer

This statement is true. The scheme in which the same vendor is receiving favorable treatment can be identified through a purchases by vendor search, as it would show if the vendor is consistently receiving a significant portion of the organization's purchases or if they are influencing procurement decisions in some way.

Question 18

When employees committing the fraud removes cash from the register and also the item allegedly being returned is debited back into the inventory, this refers to:

Accepted Answer

The answer of When employees committing the fraud removes cash...

Question 19

______________ can be detected by closely examining the documentation submitted with the cash receipts.

Accepted Answer

Fictitious refunds would not match up with any actual purchases or transactions, and could be identified by examining the documentation submitted with the cash receipts. Voided purchases and approved transactions, on the other hand, would have valid documentation and may not be fraudulent.

Question 20

Persuasive evidence of an arrangement does not exist when:

Accepted Answer

Persuasive evidence of an arrangement requires a written or verbal agreement between the parties involved. Without such an agreement, it is difficult to provide convincing proof of the arrangement's existence. The other options may impact the validity of the arrangement, but the absence of a written or verbal agreement is a key factor in determining the presence of a persuasive evidence of an arrangement.

Exam 1: Certified Fraud Examiner