Fraud Examination 4th Edition Albrecht

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 Chapter 8--Investigating Concealment 4 copy
Student: ___________________________________________________________________________

1. ____ are used by attorneys involved in litigation to track all documents.

A. Link analyses
B. Bates numbers
C. Bar codes
D. RFID tags

2. The risk that an auditor will examine a fraudulent check and not recognize it as being fraudulent is
called _________ .

A. sampling risk
B. non-sampling risk
C. systematic risk
D. systemic risk

3. During a concealment investigation, an investigator fails to recognize that an invoice had been
forged. This represents a:

A. sampling risk.
B. non-sampling risk.
C. systematic risk.
D. systemic risk.

4. Computer searches and physical asset counts usually focus on the ________ element of the
fraud triangle.

A. theft
B. concealment
C. conversion
D. inquiry
5. Methods for concealment investigation include all but which of the following?

A. Document examination
B. Honesty testing
C. Audits
D. Computer searches

6. The three most common ways to obtain documentary evidence which are valuable but difficult to
obtain are:

A. subpoena, voluntary consent, and invigilation

B. subpoena, search warrant, and voluntary consent
C. search warrant, invigilation, and surveillance
D. voluntary consent, surveillance, and invigilation

7. Which of the following statements is true?

A. Concealment investigation includes document investigation, physical asset counts, and

computer searches.
B. Most concealment investigation techniques focus on obtaining eyewitness accounts as
evidence.
C. Honesty testing is considered as a concealment investigation technique.
D. Concealment is generally accomplished by firing employees who will not go along with the
fraud.

8. ________ means that a record must be kept of when a document is received and what has
happened to it since its receipt.

A. Organization of evidence
B. Mark of evidence
C. Coordination of evidence
D. Chain of custody

9. Which of the following does NOT appear on a check that has been cashed?

A. Teller number
B. Date
C. Transaction number
D. Time of the transaction
10. _______ is the risk that the sample was not representative of the population.

A. Systematic risk
B. Non-sampling risk
C. Sampling risk
D. Compliance risk

11. Which of the following is generally considered a best practice while handling documentary
evidence?

A. Copies of the document should be used during the investigation and trial and should be kept in
the same file where the original is kept.
B. Photocopies are always preferable to original documents as evidence, as the original could be
tampered with.
C. Copies of the document should not be made and only the original document should be used
during investigation and trial.
D. Generally, a summary of the original document should be made for investigation and trial.

12. Audit is a _________ investigative method.

A. theft
B. conversion
C. concealment
D. inquiry

13. _______ are executed only by law enforcement officials and are generally used only in criminal
cases.

A. Subpoenas
B. Voluntary consents
C. Search warrants
D. Interviews

14. When the document is in the custody of a public office:

A. it is permissible to obtain photocopies, which are considered secondary evidence, in a court of

law.
B. copies of the document should be made but kept separate from the original document.
C. the document (or a copy) cannot be used as evidence, in a court of law.
D. a summary of the document will suffice.
15. Mark owns a 24-hour convenience store. Lately he has noticed that the liquor inventory
purchases have gone up by huge amounts, although sales proceeds from this category haven't
increased. He is doubting his two night-shift employees. Which is the best investigative method to
uncover such a fraud?

A. Covert operation
B. Conversion investigation
C. Inquiry investigation
D. Concealment investigation

16. Which statistical sampling allows an auditor to generalize and make inferences from the sample
to the population?

A. Probability sampling
B. Unstructured sampling
C. Discovery sampling
D. Quota sampling

17. The most common way to obtain private documents is by _________, which can be either oral or
written.

A. inquiry
B. search warrant
C. voluntary consent
D. audit

18. Which aspect of documentary evidence should be kept in mind to ensure that the documents can
be identified later and accessible for trial?

A. Organization of evidence
B. Coordination of evidence
C. Marking of evidence
D. Chain of custody of documents

19. _______ is a popular program used to index and store evidence.

A. CaseCentral
B. IDEA
C. TANZAN
D. SQL
20. ________ is a simple, statistically based method of analyzing a subset of transactions from a
larger pool.

A. Structured sampling
B. Probability sampling
C. Cluster sampling
D. Discovery sampling

21. In large cases that involve investigators, legal counsel, accountants, expert witnesses, and
management representatives, coordination can be very difficult. ________ can be useful in such
cases.

A. DatiCon
B. Analyst’s Notebook
C. CaseMap
D. Ringtail

22. The least reliable method of obtaining documentary evidence is:

A. through traditional audits.

B. through computer-based queries
C. by using statistical techniques.
D. by accident.

23. Which of the following is NOT a characteristic of sampling risk?

A. To reduce sampling risk, the investigator can increase the sample size.
B. Sampling risk cannot be quantified, and can only be slightly reduced by careful planning of the
sampling procedure.
C. To reduce sampling risk, the investigator can use a random number table.
D. In fraud examination, sampling risk can be significant.

24. The four most common examples of documentary evidence which are valuable but difficult to
obtain are:

A. Web-based e-mail accounts, private bank records, tax returns, and brokerage records.
B. Sample analytical reports, photographs and videos, tax returns, and SEC filings.
C. Office e-mail accounts, private bank records, maps and diagrams, and sample analytical
reports.
D. Photographs and videos, private bank records, tax returns, and brokerage records.
25. Orders issued by a court or a grand jury to produce documents are called:

A. writs of certiorari.
B. search warrants.
C. voluntary consent.
D. subpoenas.

26. Which of the following observations is true about discovery sampling?

A. It is one of the more difficult statistical sampling variations to understand.

B. Auditors using this method can always be certain that fraud does not exist in a population of
checks.
C. It allows an auditor to generalize and make inferences from the population to the sample.
D. It deals with the probability of discovering at least one error in a given sample size if the
population error rate is a certain percentage.

27. The best way to obtain documentary evidence is:

A. by chance, accident or tip discovery.

B. through computer-based queries of full-population accounting and other databases.
C. through interviews and interrogations.
D. through traditional audits like discovery sampling.

28. Once investigators enter their indicators into the centralized database, the software performs
_______ to find connections between people, places, and events.

A. regression analysis
B. crime analysis
C. link analysis
D. correlation analysis

29. Which of the following observations is true about subpoenas?

A. Subpoenas are generally used only in criminal cases.

B. Subpoenas are orders issued by the Company Law Board to produce documents.
C. Failure to honor a subpoena is punishable by law.
D. Every subpoena must be signed by the plaintiff and the accused.
30. Which of the following is an alternative when original documents are too voluminous to permit
careful examination?

A. A photocopy of the original document will suffice.

B. It will have to be excluded from usage as evidence.
C. A summary of its contents is acceptable.
D. There are no alternatives. The original has to be produced.

31. Discovery sampling is sometimes referred to as _____ sampling.

A. risk-devoid
B. cluster
C. unidimensional
D. stop-and-go
 Chapter 8--Investigating Concealment 4 copy Key

1. ____ are used by attorneys involved in litigation to track all documents.

A. Link analyses
B. Bates numbers
C. Bar codes
D. RFID tags

2. The risk that an auditor will examine a fraudulent check and not recognize it as being
fraudulent is called _________ .

A. sampling risk
B. non-sampling risk
C. systematic risk
D. systemic risk

3. During a concealment investigation, an investigator fails to recognize that an invoice had been
forged. This represents a:

A. sampling risk.
B. non-sampling risk.
C. systematic risk.
D. systemic risk.

4. Computer searches and physical asset counts usually focus on the ________ element of the
fraud triangle.

A. theft
B. concealment
C. conversion
D. inquiry

5. Methods for concealment investigation include all but which of the following?

A. Document examination
B. Honesty testing
C. Audits
D. Computer searches
6. The three most common ways to obtain documentary evidence which are valuable but difficult
to obtain are:

A. subpoena, voluntary consent, and invigilation

B. subpoena, search warrant, and voluntary consent
C. search warrant, invigilation, and surveillance
D. voluntary consent, surveillance, and invigilation

7. Which of the following statements is true?

A. Concealment investigation includes document investigation, physical asset counts, and

computer searches.
B. Most concealment investigation techniques focus on obtaining eyewitness accounts as
evidence.
C. Honesty testing is considered as a concealment investigation technique.
D. Concealment is generally accomplished by firing employees who will not go along with the
fraud.

8. ________ means that a record must be kept of when a document is received and what has
happened to it since its receipt.

A. Organization of evidence
B. Mark of evidence
C. Coordination of evidence
D. Chain of custody

9. Which of the following does NOT appear on a check that has been cashed?

A. Teller number
B. Date
C. Transaction number
D. Time of the transaction

10. _______ is the risk that the sample was not representative of the population.

A. Systematic risk
B. Non-sampling risk
C. Sampling risk
D. Compliance risk
11. Which of the following is generally considered a best practice while handling documentary
evidence?

A. Copies of the document should be used during the investigation and trial and should be
kept in the same file where the original is kept.
B. Photocopies are always preferable to original documents as evidence, as the original could
be tampered with.
C. Copies of the document should not be made and only the original document should be
used during investigation and trial.
D. Generally, a summary of the original document should be made for investigation and trial.

12. Audit is a _________ investigative method.

A. theft
B. conversion
C. concealment
D. inquiry

13. _______ are executed only by law enforcement officials and are generally used only in
criminal cases.

A. Subpoenas
B. Voluntary consents
C. Search warrants
D. Interviews

14. When the document is in the custody of a public office:

A. it is permissible to obtain photocopies, which are considered secondary evidence, in a court

of law.
B. copies of the document should be made but kept separate from the original document.
C. the document (or a copy) cannot be used as evidence, in a court of law.
D. a summary of the document will suffice.
15. Mark owns a 24-hour convenience store. Lately he has noticed that the liquor inventory
purchases have gone up by huge amounts, although sales proceeds from this category
haven't increased. He is doubting his two night-shift employees. Which is the best investigative
method to uncover such a fraud?

A. Covert operation
B. Conversion investigation
C. Inquiry investigation
D. Concealment investigation

16. Which statistical sampling allows an auditor to generalize and make inferences from the
sample to the population?

A. Probability sampling
B. Unstructured sampling
C. Discovery sampling
D. Quota sampling

17. The most common way to obtain private documents is by _________, which can be either oral
or written.

A. inquiry
B. search warrant
C. voluntary consent
D. audit

18. Which aspect of documentary evidence should be kept in mind to ensure that the documents
can be identified later and accessible for trial?

A. Organization of evidence
B. Coordination of evidence
C. Marking of evidence
D. Chain of custody of documents

19. _______ is a popular program used to index and store evidence.

A. CaseCentral
B. IDEA
C. TANZAN
D. SQL
20. ________ is a simple, statistically based method of analyzing a subset of transactions from a
larger pool.

A. Structured sampling
B. Probability sampling
C. Cluster sampling
D. Discovery sampling

21. In large cases that involve investigators, legal counsel, accountants, expert witnesses, and
management representatives, coordination can be very difficult. ________ can be useful in
such cases.

A. DatiCon
B. Analyst’s Notebook
C. CaseMap
D. Ringtail

22. The least reliable method of obtaining documentary evidence is:

A. through traditional audits.

B. through computer-based queries
C. by using statistical techniques.
D. by accident.

23. Which of the following is NOT a characteristic of sampling risk?

A. To reduce sampling risk, the investigator can increase the sample size.
B. Sampling risk cannot be quantified, and can only be slightly reduced by careful planning of
the sampling procedure.
C. To reduce sampling risk, the investigator can use a random number table.
D. In fraud examination, sampling risk can be significant.

24. The four most common examples of documentary evidence which are valuable but difficult to
obtain are:

A. Web-based e-mail accounts, private bank records, tax returns, and brokerage records.
B. Sample analytical reports, photographs and videos, tax returns, and SEC filings.
C. Office e-mail accounts, private bank records, maps and diagrams, and sample analytical
reports.
D. Photographs and videos, private bank records, tax returns, and brokerage records.
25. Orders issued by a court or a grand jury to produce documents are called:

A. writs of certiorari.
B. search warrants.
C. voluntary consent.
D. subpoenas.

26. Which of the following observations is true about discovery sampling?

A. It is one of the more difficult statistical sampling variations to understand.

B. Auditors using this method can always be certain that fraud does not exist in a population of
checks.
C. It allows an auditor to generalize and make inferences from the population to the sample.
D. It deals with the probability of discovering at least one error in a given sample size if the
population error rate is a certain percentage.

27. The best way to obtain documentary evidence is:

A. by chance, accident or tip discovery.

B. through computer-based queries of full-population accounting and other databases.
C. through interviews and interrogations.
D. through traditional audits like discovery sampling.

28. Once investigators enter their indicators into the centralized database, the software performs
_______ to find connections between people, places, and events.

A. regression analysis
B. crime analysis
C. link analysis
D. correlation analysis

29. Which of the following observations is true about subpoenas?

A. Subpoenas are generally used only in criminal cases.

B. Subpoenas are orders issued by the Company Law Board to produce documents.
C. Failure to honor a subpoena is punishable by law.
D. Every subpoena must be signed by the plaintiff and the accused.
30. Which of the following is an alternative when original documents are too voluminous to permit
careful examination?

A. A photocopy of the original document will suffice.

B. It will have to be excluded from usage as evidence.
C. A summary of its contents is acceptable.
D. There are no alternatives. The original has to be produced.

31. Discovery sampling is sometimes referred to as _____ sampling.

A. risk-devoid
B. cluster
C. unidimensional
D. stop-and-go