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Fraud_HW_1 Chapters_1_3

Fraud_HW_1 Chapters_1_3 - Homework#1 Chapters 1 3 Name...

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Homework #1 Name: _______________________ Chapters 1 – 3 Section: ___________________ True/False 1. F Telemarketing fraud is an example of employee embezzlement 2. F Unintentional errors in financial statements are a form of fraud 3. T In customer fraud, customers do not pay for goods purchased 4. T The three elements of the fraud triangle are a perceived pressure, a perceived opportunity, and rationalization 5. F Effective fraud fighters usually put most of their time and effort into minimizing the pressures for fraud perpetrators to commit fraud 6. F An individual who owns his or her own business and is the sole employee needs many control procedures 7. T The elements of the fraud triangle by which the investigative techniques are often classified are 1) the theft act, 2) concealment efforts, and 3) conversion methods 8. T Criminal conviction is much more difficult to achieve than a civil judgment because it requires proof ‘beyond a reasonable doubt” that the perpetrator intentionally stole assets 9. T Legal action taken by an organization can affect the probability of whether fraud will reoccur 10. T Expectations about punishment must be communicated randomly among work groups if fraud is to be prevented
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Short Answers 1. When vendor fraud occurs, who is the perpetrator and who is the victim? Vendor fraud is either perpetrated by vendors alone or vendors working with buyers. The victim is usually tax payers when the vendor is collaborating with the buyer or buyers when the vendor is working alone. 2. In what ways did fraudulent mutual funds benefit from committing fraud? 3. List three internal control activities: a) Control environment b) Risk assessment c) Information and communication 4. What are the three common pressures that cause perpetrators to commit fraud? Give examples of each.
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