ABA ABA Internal Controls & Risk Management 3

Question 1

What is 'occupational fraud' as defined by the Association of Certified Fraud Examiners (ACFE)?

Accepted Answer

The use of one's occupation for personal enrichment through deliberate misuse of resources

Answer

Occupational fraud occurs when an employee uses their position within an organization for personal enrichment through the misuse or theft of company resources.

Question 2

Which of the following is the most common type of occupational fraud according to ACFE research?

Accepted Answer

Asset misappropriation

Answer

Asset misappropriation, which includes theft of cash, inventory, or other assets, is by far the most common type of occupational fraud according to ACFE research.

Question 3

What is a 'red flag' in fraud detection?

Accepted Answer

An unusual indicator that may suggest fraudulent activity

Answer

A red flag is a warning sign or unusual indicator in financial records or employee behavior that may suggest fraudulent activity requiring further investigation.

Question 4

Which document control procedure helps prevent check fraud?

Accepted Answer

Keeping blank checks locked and using pre-numbered checks with dual signatures

Answer

Locking blank checks, using pre-numbered checks, and requiring dual signatures are document control procedures that significantly reduce check fraud risk.

Question 5

What is the 'fraud triangle'?

Accepted Answer

Three conditions (pressure, opportunity, rationalization) that typically lead to fraud

Answer

The fraud triangle identifies three conditions that typically exist when fraud occurs: pressure (motivation), opportunity (weak controls), and rationalization (justification).

(ABA) Accredited Business Accountant Practice Test

(ABA) Accredited Business Accountant Practice Test

ABA ABA Internal Controls & Risk Management 3