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Chapter 1 – Introduction
1. Which of the following best describes the objective of a fraud examination?
a. To make recommendations to management about how to prevent fraud
b. To determine whether financial statements are free of misstatements due to fraud
c. To express an opinion on the guilt or innocence of a suspect
d. To determine whether a crime has been committed, and if so, who is responsible
2. Which of the following is not a part of the fraud theory approach?
a. Analyze available data.
b. Develop “what-if” scenarios.
c. Identify who committed the fraud.
d. Refine the hypothesis.
3. Once sufficient predication has been established, what is the first step a fraud examiner following the fraud theory
approach should take?
a. Create a hypothesis.
b. Analyze data.
c. Interview witnesses.
d. Interview the suspect.
4. The discipline of fraud examination includes all of the following except:
a. Writing investigative reports
b. Determining the guilt of the suspect
c. Testifying to findings
d. Interviewing witnesses
5. Fraud examination differs from auditing in that fraud examination is:
c. General in scope
d. All of the above
6. Predication, although important, is not required in a fraud examination.
7. In a fraud examination, evidence is usually gathered in a manner that moves from general to specific.
8. Which of the following is the correct order for a fraud examiner to interview witnesses?
a. Corroborative witnesses, neutral third-parties, co-conspirators, suspect
b. Suspect, co-conspirators, corroborative witnesses, neutral third-parties
c. Neutral third-parties, corroborative witnesses, co-conspirators, suspect
d. Suspect, corroborative witnesses, co-conspirators, neutral third-parties
9. In order to prove that fraud occurred, four elements must be present. Which of the following is not one of those
a. A material false statement
b. Knowledge that the statement was false
c. Reliance on the false statement by the victim
d. Intent to cause the victim damages
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