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05 - Chapter 5 Recognizing the Symptoms of Fraud MULTIPLE...

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Chapter 5 Recognizing the Symptoms of Fraud MULTIPLE CHOICE 1. Of the elements of fraud, which is usually least likely to be detected by auditors? a. Theft act b. Concealment c. Conversion d. Personal pressures ANS: A A: The actual act is hardest for an auditor to see. the nature of fraud is just that, to deceive people B&C: Auditors have a lot of capability of tracing concealment, and some for tracing conversion D: Auditors usually don't get to know auditees well enough to know their pressures but these are prob- ably more likely to be seen than the act itself. 2. Auditors usually detect fraud in which element of the crime? 3. It is discovered that a bank does not require two signatures on cashier's checks exceeding $500,000. This is an example of: 4. One of the most effective ways to prevent fraud is to implement a system of independent checks. Which of the following is not a common independent check?
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5. Which of the following is an analytical anomaly that could be related to fraud? a. Journal entries that lack documentation b. Late charges that are incurred on Accounts Payable c. Increased scrap d. The fraud perpetrator increases his smoking habit ANS: C A: This is an accounting anomaly. B: This is an accounting anamoly. C: Correct. D: This is a change in lifestyle.
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