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Fraud Examination 3rd Edition Albrecht Test Bank
Fraud Examination 3rd Edition Albrecht Test Bank
Fraud Examination 3rd Edition Albrecht Test Bank
Test Bank
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Chapter 8
Investigating Concealment
MULTIPLE CHOICE
3. The risk that an auditor examines a fraudulent check and does not recognize it as being fraudulent is
called:
a. Sampling Risk
b. Non-Sampling Risk
c. Discovery Sampling Risk
d. Population Sampling Risk
ANS: B
A: Sampling risk is the risk that the sample is not representative of the population
C: There is no such term
D: There is no such term
4. All of the following information can be obtained from a cancelled check except:
a. Account number of the maker
b. Account number of the person who presented the check
c. A trail of all people who transferred the check (assignees and assignors)
d. Nature of transaction (cashed, deposited, presented for payment)
ANS: C
A: Incorrect; this can be determined from a cancelled check
B: Incorrect; this can be determined from a cancelled check
C: Correct
D: Incorrect; this can be determined from a cancelled check
5. Computer searches and physical asset counts usually focus on which element of a fraud?
a. Theft act
b. Concealment
c. Conversion
d. Inquiry investigation
ANS: B
B: Correct; they usually focus on concealment
6. Methods for concealment investigation include all but which of the following?
a. Document examination
b. Honesty testing
c. Audits
d. Computer searches
ANS: B
A: This is a concealment investigation technique
C: This is a concealment investigation technique
D: This is a concealment investigation technique
9. Which of the following is not a common way to obtain hard-to-get documentary evidence?
a. Subpoena
b. Search Warrant
c. Voluntary Consent
d. Force
ANS: D
D: Force may obtain information but it is not legal.
10. Three most common ways to obtain documentary evidence that is usually difficult to get are
_____________.
a. By subpoena, voluntary consent, and invigilation
b. By subpoena, search warrant, and voluntary consent
c. Search warrant, invigilation, and surveillance
d. Voluntary consent, surveillance, and invigilation
ANS: B
B: Correct
11. Which of the following is generally not an approach to investigate the concealment aspect of fraud?
a. Document examination
b. Audits
c. Computer searches
d. Polygraph tests
ANS: D
D: Polygraph testing is an approach usually associated with honesty testing, not investigating
concealment.
12. Which of the following does not appear on a check, which has been cashed?
a. Teller number
b. Date
c. Transaction number
d. Time of the transaction
ANS: D
A: A appears on the back of a check.
B: B appears on the back of a check.
C: C appears on the back of a check.
D: Correct
13. Which of the following terms describes the risk that the sample is not representative of the population?
a. Errors
b. Non-sampling risk
c. Sampling risk
d. Detection risk
ANS: C
A: This has nothing to do with sampling
B: Non-sampling risk is the risk that a finding will be misinterpreted.
D: This has nothing to do with sampling
14. Documents presented in court are often disputed. The following are questions that arise from disputed
documents except:
a. Was the signature written before the rest of the document?
b. Is the signature genuine?
c. Was the writing disguised?
d. How old are the paper, printing and ink used?
e. All of the above are questions that arise from disputed documents
ANS: A
E: All of the above are correct.
18. Computer searches and physical asset counts are methods for ___________.
a. Theft investigation
b. Concealment investigation
c. Conversion investigation
d. Inquiry investigation
ANS: B
A: Incorrect
B: Correct
C: Incorrect
D: Incorrect
19. Moe owns a 24-hour convenience store. He has noticed that the amounts of liquor inventory purchases
have gotten bigger and frequent lately. Nevertheless, sales provided by this particular item haven’t
increased. He is concerned that the two night-shift employees might be involved. The best method to
use for this investigation is:
a. Theft investigation
b. Conversion investigation
c. Embezzlement investigation
d. Concealment investigation
ANS: D
D: Correct; Moe could use concealment investigation techniques to learn how his employees are
concealing the fraud and the extent of the embezzlement.
20. You are completely sure of which variable to examine in a concealment fraud case. The most efficient
investigation method would be:
a. Computer searches, since they better identify signals of fraud
b. Random sampling
c. Discovery sampling, since they better identify signals of fraud
d. Check all records, because it eliminates both sampling and non-sampling risk
ANS: C
A: Incorrect
B: Incorrect; Random sampling is not as efficient as discovery sampling
C: Correct
D: Incorrect; If we know which variable to examine, it’s unnecessary to check every record.
21. Which of the following is a common method used by auditors to look for the existence of fraud?
a. By asking clients about past fraud experiences
b. By gathering documentary evidence and checking for fraud symptoms
c. By conducting anti-fraud training sessions for all employees
d. None of the above
ANS: B
B: Correct
23. Documents are often the incriminating evidence for fraud. Which of the following should be used when
ensuring that the documents are legitimate and accessible for trial?
a. Photograph the evidence
b. Digitally enhance the evidence
c. Mark the evidence
d. Preserve the evidence in a non-transparent container
ANS: C
C: Correct; evidence should be uniquely marked so that it may be identified later
24. Concealment is generally accomplished by manipulating any of the following documents except:
a. Bills of laden
b. Sales receipts
c. Titles
d. Insurance policies
e. All of the above can be manipulated to conceal a fraud
ANS: E
E: Correct
ANS: E
C: Case management software is generally quite expensive.