ADA Fraud Detection Analytics 2

Question 1

Which analytical approach traces financial transactions through multiple accounts or entities to detect complex money laundering schemes?

Accepted Answer

Network analysis

Answer

Stratification analysis

Answer

Regression testing

Answer

Horizontal trend analysis

Question 2

In procurement fraud, what does 'splitting' refer to?

Accepted Answer

Breaking up contracts into smaller amounts to avoid competitive bidding thresholds

Answer

Dividing contract payments between multiple vendors to spread liability

Answer

Sharing kickbacks between colluding employees

Answer

Separating purchase orders from receiving reports to bypass controls

Question 3

Which machine learning technique is most commonly used in fraud detection to classify transactions as fraudulent or legitimate based on historical labeled data?

Accepted Answer

Supervised classification

Answer

K-means clustering

Answer

Principal component analysis

Answer

Time series decomposition

Question 4

Which red flag in procurement data most commonly indicates bid rigging among competing vendors?

Accepted Answer

A small group of vendors taking turns winning contracts in a rotating pattern

Answer

All vendors submitting bids on the exact same day

Answer

Vendors submitting bids from different geographic regions

Answer

Some vendors choosing not to submit bids on certain lower-value contracts

Question 5

What does a 'related party' analysis in fraud detection primarily examine?

Accepted Answer

Undisclosed business relationships between employees and vendors or customers

Answer

Statistical correlations between different financial data sets

Answer

The relationship between budget variances and actual spending

Answer

Relationships between financial ratios over multiple reporting periods

Question 6

What is 'lapping' in accounts receivable fraud?

Accepted Answer

Stealing customer payments and concealing the theft using subsequent payments from other customers

Answer

Overstating customer account balances to inflate total assets

Answer

Recording fictitious sales at period end to inflate revenue

Answer

Granting unauthorized extended credit terms to favored customers

Question 7

Which data analytics test is most effective for detecting fictitious vendors in accounts payable?

Accepted Answer

Matching vendor addresses, phone numbers, or bank details against employee records

Answer

Regression analysis of payment amounts over time

Answer

Stratifying invoices by payment amount to find anomalies

Answer

Calculating the average payment processing time by vendor