1. Although most perpetrators begin their thefts because of a perceived critical need, they usually continue to embezzle in order to: a. Beat the system. b. Fulfill an inner desire to commit fraud. c. Improve their lifestyle. d. Achieve a higher self-esteem. 2. Evidence gathered from public records can be useful in: a. Identifying with the suspect. b. Obtaining a confession. c. Making the suspect feel at ease. d. None of the above. 3. The net worth method of analyzing financial information can help to determine: a. The suspect's feelings about the organization. b. Possible perpetrators of the fraud. c. The suspect's personality characteristics. d. The amount of embezzled funds. 4. Which of the following organizations maintain public information that can be accessed in record searches? a. Local agencies. b. State agencies. c. Federal agencies. d. All of the above. 5. How useful are local and county records in fraud investigations? a. Very useful. b. Not useful. c. Somewhat useful. d. Aren't allowed in the investigation of fraud. 6. Which of the following laws regulates activities of credit, insurance, and employment investigations? a. Fair Investigation Act of 1980. b. Fair Credit Reporting Act of 1971 and Fair and Accurate Credit Transactions Act of 2003. c. Credit, Insurance, and Employment Investigation Act. d. There is no governing law. 7. The net worth method is effective: a. As evidence in court. b. To help obtain a confession. c. To conduct an interview of suspects. d. All of the above. 8. Conversion investigations focus on how suspects: a. Had opportunities to steal. b. Had motives to commit fraud. c. Spent stolen money. d. Committed the actual theft. 9. Which of the following is a possible use of conversion-based investigation techniques? a. Searching public records to trace purchases of assets and payments of liabilities. b. Attempting to locate previous spouses' bank account records. c. Locating significant amounts of money held by related parties. d. All of the above. 10. Most conversion investigations involve searching public records and other sources to trace: a. Purchases of assets. b. Payments of liabilities. c. Changes in lifestyle. d. Net worth. e. All of the above.
> Why is spoofing a significant risk in e-business?
> What is sniffing?
> How can the authenticity of a party in an e-business transaction be verified?
> What are some common ways e-business fraud is perpetrated?
> Is it necessary to report illegal income (such as embezzled money) on income tax returns?
> What is the CI division of the IRS?
> Why should fraud investigators involved in bankruptcy or divorce cases be careful about what they put in their report?
> What advantages do third-party providers like application service providers offer?
> What methods of security through obscurity does your school employ? How do these methods increase security? How do they decrease security?
> Can e-business fraud risks ever be completely eliminated?
> 1. Paper-and-pencil honesty tests are most frequently used to determine whether someone has committed a crime. 2. Failure to pass a polygraph test means certain guilt. 3. Interviews during the rationalization stage are often not objective and can be ha
> In what ways do e-business transactions pose heightened fraud risks?
> What are some of the most common ways that fraud perpetrators conceal and transfer assets or income during bankruptcy and divorces?
> What are some of the most common tax fraud schemes?
> What are some of the most common divorce fraud schemes?
> What are some of the most common bankruptcy fraud schemes?
> When a bankruptcy takes place, who are the major participants involved?
> What is tax fraud?
> What are some of the more relevant sections of the Bankruptcy Code related to fraud?
> What is bankruptcy? What are the most common types of bankruptcy?
> Who usually initiates the filing of an application for retention of an investigator?
> 1. Assets most often improperly capitalized are fixed assets such as property or equipment. 2. Financial statement fraud involving footnote disclosures can be either frauds of omission or frauds of commission. 3. A company that claims to be something
> 1. Most fraud cases are tried in federal courts. 2. State courts hear bankruptcy cases. 3. Civil cases must consist of a jury of at least six jurors. 4. The prosecution usually prefers to present evidence at a grand jury because the accused does not h
> 1. For various reasons, the net worth method tends to be a conservative estimate of amounts stolen. 2. Conversion is the third element of the fraud investigation triangle. 3. The Gramm-Leach-Bliley Act of 1999 made it more difficult for officials and
> 1. Perpetrators usually save what they steal. 2. One common investigation procedure determines how perpetrators convert or spend their time. 3. Investigations of perpetrators' net worth and lifestyles help investigators know what class of society the
> 1. Which of the following is true regarding fraud? a. It is easily identified. b. It is seldom observed. c. When a fraud occurs, there is no question whether or not a crime has been committed. d. Many witnesses are usually available when fraud occurs
> 1. Once fraud has been committed, there are no winners. 2. Fraud prevention involves two fundamental activities: (1) a hotline for tips and (2) assessing the risk of fraud and developing concrete responses to mitigate the risks and eliminate opportunit
> 1. Which of the four types of evidence includes interrogation and honesty testing? a. Testimonial. b. Documentary. c. Physical. d. Personal observation. 2. The three elements present in most cases of fraud are: a. Theft act, rationalization, and o
> 1. Usually, for everyone involved-especially victims-the investigation of fraud is very: a. Pleasant and relaxing. b. Educational. c. Exciting. d. Traumatic and difficult. 2. To prevent fraud from recurring. most organizations and other fraud victi
> 1. In a fraud investigation, documents: a. Usually contain extremely valuable information. b. Are rarely used in court. c. Are not reliable sources of information. d. Are only valuable in obtaining a confession. 2. Chain of custody refers to: a. Ma
> 1. Data-driven fraud detection can pay large dividends and is an effective way to reduce the cost of fraud in any organization. 2. Unexplained changes are common in financial statements. 3. Balance sheets must be converted to change statements before
> 1. Unusual patterns always indicate the existence of fraud. 2. ODBC is the best approach to import because it achieves a direct, rich connection to the source database. 3. Data-driven analysis uses the company's database to search for normal relation
> 1. Even a good system of internal controls will often not be completely effective because of fallibilities of the people applying and enforcing the controls. 2. The increasingly complex nature of business helps to decrease the number of collusive fraud
> 1. Even with the right opportunity or significant pressure, most people would probably not steal or embezzle. 2. Studies show that a positive and honest work culture in a company does little to prevent fraud. 3. An important factor in creating a cult
> 17. Most people who commit fraud feel a perceived financial pressure. 18. Studies have found that the most common internal control problem when frauds occur is having a lack of proper authorizations. 19. Fraud perpetrators who manipulate accounting re
> 1. The most effective way to reduce losses from fraud is: a. Detecting fraud early. b. Implementing proactive fraud detection programs. c. Preventing fraud from occurring. d. Severely punishing fraud perpetrators. 2. To successfully prevent fraud,
> 9. First-time offenders usually exhibit no psychological changes. 10. Psychopaths feel no guilt because they have no conscience. 11. It is safe to assume that fraud has not occurred if one or more elements of the fraud triangle cannot be observed.
> 1. Analytical anomalies are present in every fraud. 2. Recording an expense is a possible way to conceal the theft of cash. 3. A check is an example of a source document. 4. Internal control weaknesses give employees opportunities to commit fraud.
> 1. As long as a sample is selected randomly, it will always be representative of the population as a whole. 2. Even if photocopies of original documents are allowed to be introduced as evidence in a court of law, they are still considered secondary evi
> 1. Concealment is the covering of tracks, obscuring of evidence, and removal of red nags to hide a perpetrator's fraud. 2. Checks are excellent sources of physical evidence. 3. Traditional chain of custody evidence procedures are not appropriate when
> 1. When hiring, it is usually difficult to know which employees are capable of committing fraud, especially without performing thorough background checks. 2. The three elements of the fraud triangle are a perceived pressure, a perceived opportunity, an
> 1. Which of the following kinds of pressure is most often associated with fraud? a. Work-related pressures. b. Financial pressures. c. Vice pressures. d. None of the above. 2. Which of the following is not a primary control activity? a. Use of doc
> 1. A vulnerability chart: a. Forces investigators to explicitly consider all aspects of a fraud. b. Shows the history of fraud in a company. c. Identifies weaknesses in every aspect of a company's internal control. d. Gives a detailed record of all t
> 1. Which of the following is not a category used in the fraud triangle plus inquiry paradigm? a. Theft investigative techniques. b. Concealment investigative techniques. c. Action investigative techniques. d. Conversion investigative techniques. 2.
> 1. Fraud perpetrators: a. Look like other criminals. b. Have profiles that look like most honest people. c. Are usually very young. d. Are none of the above. 2. Which of the following is not one of the three elements of the fraud triangle? a. Perc
> 1. Which of the following is usually the most effective tool in preventing and detecting fraud? a. Discouraging collusion between employees and customers or vendors. b. Effective investigations of fraud symptoms. c. Having a good system of internal co
> 1. Many organizations merely dismiss dishonest employees because of the expense and time involved in prosecuting them. 2. Appropriate hiring will not decrease an organization's risk of fraud. 3. An individual who owns his or her own business and is t
> 1. People will often be dishonest if they are placed in an environment of: a. Poor controls. b. High pressure. c. Low integrity. d. Loose accountability. e. All of the above. 2. Which of the following factors contribute to creating a corporate cul
> 1. A database of criminal records maintained by the FBI is: a. The CIA. b. The III. c. The NCIC. d. Both a and c. e. Both b and c. 2. Who among the following are usually some of the best and most helpful federal fraud investigators? a. Officers o
> 1. Fraud is difficult to detect because some fraud symptoms often cannot be differentiated from non-fraud factors that appear to be symptoms. 2. The three elements of the fraud triangle by which the investigative techniques are often classified are (1)
> 1. Most investigators rely heavily on interviews to obtain the truth. 2. Physical evidence includes evidence gathered from paper, computers, and other written documents. 3. Legal action taken by an organization can affect the probability of whether f
> 1. When vertical analysis is performed: a. Ratios are used to detect fraud. b. Changes in significant balance totals are examined. c. Financial statement balances are converted to percentages. d. Total revenues are compared to total expenses. 2. Ho
> 1. When detecting fraud, it is important that fraud investigators: a. Remain objective and neutral b. Assume guilt. c. Assume innocence. d. None of the above. 2. Data-driven fraud detection: a. Determines the cost of fraud. b. Identifies possible
> 1. Tailing includes the use of video, e-mail, wiretapping. and access to PCs. 2. Invigilation is a theft act investigative technique that involves close supervision of suspects during an examination period. 3. To get an accurate reading. it is genera
> 1. The fraud triangle plus inquiry paradigm is an effective way to understand the various types of fraud investigation methods. 2. One advantage of using a vulnerability chart is that it forces investigators to consider all aspects of a fraud 3. Elec
> 9. Embezzlement of assets reduces the left side of the accounting equation. To conceal the theft, the embezzler must find a way to reduce the right side of the accounting equation. A perpetrator would most likely reduce the right side of the equation by:
> 1. Which of the following methods of gathering documents is based primarily on luck? a. Documents discovered during audits. b. Hard-to-get private documents that are subpoenaed. c. Documents discovered through searching public sources. d. Documents p
> Television shows with large amounts of sex or violence tend to attract more viewers. Advertisers want large audiences, but they also want viewers to remember the brand names of their products. A study was undertaken to determine the effect that shows wit
> Refer to Exercise A17.9. Weight is a major factor that determines whether a person will need a hip or knee replacement and at what age. To learn more about the topic, a medical researcher randomly sampled individuals who had hip replacement 1code = 12 an
> Over one decade (1995–2005), the number of hip and knee replacement surgeries increased by 87%. Because the costs of hip and knee replacements are so expensive, private health-insurance and government-operated health-care plans have become more concerned
> Refer to Exercise A15.7. The financial analyst undertook another project wherein respondents were also asked the age of the head of the household. The choices are 1. Younger than 25 2. 25 to 34 3. 35 to 44 4. 45 to 54 5. 55 to 64 6. 65 and older The resp
> Mouth-to-mouth resuscitation has long been considered better than chest compression for people who have suffered a heart attack. To determine if this indeed is the better way, Japanese researchers analyzed 4, 068 adult patients who had cardiac arrest wit
> The U.S. National Endowment for the Arts conducts surveys of American adults to determine, among other things, their participation in various arts activities. A recent survey asked a random sample of American adults whether they participate in photograph
> Refer to Exercise 13.35. The executive did a further analysis by taking another random sample. This time she tracked the number of customers who have had an accident in the last 5 years. For each she recorded the total amount of repairs and the credit sc
> It is generally assumed that alcohol consumption tends to make drinkers more impulsive. However, a recent study in the journal Alcohol and Alcoholism may contradict this assumption. The study took a random sample of 76 male undergraduate students and div
> In an effort to explain the results of Exercise A15.9, a researcher recorded the distances for the random sample of British and American golf courses. Can we infer that British courses are shorter than American courses?
> Organizations that sponsor various leisure activities need to know the number of people who wish to participate. Bureaucrats need to know the number because many organizations apply for government grants to pay the costs. The U.S. National Endowment for
> Because shelf space is a limited resource for a retail store, product selection, shelf-space allocation, and shelf-space placement decisions must be made according to a careful analysis of profitability and inventory turnover. The manager of a chain of v
> Garlic has long been considered a remedy to ward off the common cold. A British researcher organized an experiment to see if this generally held belief is true. A random sample of 146 volunteers was recruited. Half the sample took one capsule of an allic
> One of the arguments put forth by advocates of lower tuition fees is that children of low or moderate income families will not be able to pay for a child’s university education. To examine this issue, a random sample of families whose children were at le
> How many golfers are there in the United States? A survey of American adults (age 18 and above) asked whether they had played golf at least once a month during the summer. The responses are 2 = yes and 1 = no. The survey also asked respondents to indicat
> What should be the priority of paramedics who respond to accidents? Should they treat the patients with their limited facilities or should they rush the victims to the nearest hospital (an approach known as “scoop and run”)? A research project begun in 1
> The high cost of medical care makes it imperative that hospitals operate efficiently and effectively. As part of a larger study, patients leaving a hospital were surveyed. They were asked how satisfied they were with the treatment they received. The resp
> Winter is the influenza season in North America. Each winter, thousands of elderly and sick people die from the flu and its attendant complications. Consequently, many elderly people receive flu shots in the fall. It has generally been accepted that youn
> Under the rules of Canada’s Employment Insurance (EI) plan, some workers can use EI repeatedly after working only a short time. The amount of time needed to qualify for EI varies by region and by occupation. In a study undertaken by researchers, regular
> Ever since the discovery of germs, parents have been telling their children to wash their hands. Common sense tells us that this should help minimize the spread of infectious diseases and lead to better health. A study reported in the University of Calif
> Scrabble is one of the oldest and most popular board games. It is played all over the world, and there is even an annual world championship competition. The game is played by forming words and placing them on the board to obtain the maximum number of poi
> In an attempt to learn more about traffic congestion in a large North American city, the number of cars passing through intersections was determined (National Post, October 18, 2006). The number of cars was counted in 5-minute samples throughout several
> A small but important part of a university library’s budget is the amount collected in fines on overdue books. Last year, a library collected $75,652.75 in fine payments; however, the head librarian suspects that some employees are not bothering to colle
> Obesity among children in North America is said to be at near-epidemic proportions. Some experts blame television for the problem, citing the statistic that children watch an average of 26 hours per week. During this time, children are not engaged in any
> How does dieting affect the brain? This question was addressed by researchers in Australia. The experiment used 40 middle-age women in Adelaide, Australia; half were on a diet and half were not (National Post, December 1, 2003). The mental arithmetic par
> The experiment to determine the effect of taking a preparatory course to improve SAT scores in Exercise A13.16 was criticized by other statisticians. They argued that the first test would provide a valuable learning experience that would produce a higher
> An analysis of the applicants of all MBA programs in North America reveals that the proportions of each type of undergraduate degree are as follows: Undergraduate Degree Proportion (%) BA (1) 50 BBA (2) 20 BSc (3) 15 BEng
> Summarize what you have discovered about the relationship between political philosophy and preference for government action in Exercises 16.146– 16.149. In particular, discuss the coefficients of determination.
> HELPSICK: Is it government’s responsibility to help pay for doctor and hospital bills? (1 = Government should help, 2, 3, 4, 5 = People should help themselves.)
> HELPNOT: Should government do more or less to solve country’s problems? (1 = Government should do more; 2, 3, 4, 5 = Government does too much.)
> HELPPOOR: Should government improve standard of living of poor people? (1 = Government act; 2, 3, 4, 5 = People should help themselves.)
> EQWLTH: Should government reduce income differences between rich and poor? (1 = Government should reduce differences; 2, 3, 4, 5, 6, 7 = No government action.)
> Do more educated individuals lean to the liberal end of the political philosophy spectrum? Conduct a test to determine whether there is enough evidence to conclude that as education (EDUC) increases the political philosophy score (POLVIEWS) decreases. Br
> Is there sufficient evidence to conclude that as income (RINCOME) rises people grow more conservative (POLVIEWS)? What is the p-value?
> Simco Inc. is a manufacturer that purchased a new piece of equipment designed to reduce costs. After several months of operation, the results were quite unsatisfactory. The operations manager believes that the problem lies with the machine’s operators, w
> As people grow older do they become more conservative? If so, there should be a positive linear relationship between age (AGE) and political philosophy (POLVIEWS). Use an appropriate statistical procedure to determine whether there is enough evidence to
> Discuss what assumption(s) is necessary to make the POLVIEWS spectrum responses an interval variable.
> Are more educated people (EDUC) more likely to believe that that compared to their parents at their age their standard of living is better (PARSOL: 1 = Much better, 2 = Somewhat better, 3 = About the same, 4 = Somewhat worse, 5 = Much worse)? Perform an
> Can we conclude from the data that more educated (EDUC) people are more likely to perceive themselves as healthier (HEALTH: 1 = Excellent, 2 = Good, 3 = Fair, 4 = Poor)?
> Can we infer from the data that jobs that are most secure (JOBLOSE: 1 =Very likely, 2 = Fairly likely, 3 = Not too likely, 4 = Not likely) are also the most satisfying (SATJOB: 1 = Very satisfied, 2 = Moderately satisfied, 3 = A little dissatisfied, 4 =
> Do the most satisfying jobs also produce the highest income? Test to determine whether there is enough evidence to infer that more satisfying jobs (SATJOB: 1 = Very satisfied, 2 = Moderately satisfied, 3 = A little dissatisfied, 4 = Very dissatisfied) ha
> Is there sufficient evidence to infer that more educated (EDUC) people read newspapers more often (NEWS: 1 = Every day, 2 = A few times per week, 3 = Once a week, 4 = Less than once a week, 5 = Never)?
> Do older Americans have a greater fear of losing their jobs? Test to determine whether there is enough evidence to conclude that as one gets older (AGE) the probability of losing one’s job ( JOBLOSE: 1 = Very likely, 2 = Fairly likely, 3 = Not too likely
> Are richer (RINCOME) Americans pessimistic about their children’s chances of having a higher standard of living (KIDSSOL: When your children are at your age will their standard of living be. . . 1. Much better, 2. Somewhat better, 3. About the same, 4. S
