Practice Test Geeks(CCA) Certified Construction Auditor Practice Test
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Fraud Detection and Prevention in Construction Flashcards

6 cards from real CCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Fraud Detection and Prevention in Construction flashcards as text

  1. Which anti-fraud control is most effective at deterring collusion between a contractor's project manager and a subcontractor?

    Answer: Mandatory job rotation and vendor audit rights

    Job rotation disrupts established collusive relationships, and contract audit rights allow the owner to examine subcontractor records independently.

  2. A construction auditor suspects change order inflation. Which procedure provides the strongest evidence?

    Answer: Comparing change order costs to independent cost estimates and actual subcontractor quotes

    Comparing claimed change order costs to independent estimates and the underlying subcontractor bids directly reveals whether amounts are inflated.

  3. Which condition most increases the risk of fraud in a construction project?

    Answer: A single individual controlling both purchasing and payment approval

    Concentration of purchasing and payment authority in one person eliminates the checks and balances that prevent unauthorized or fraudulent transactions.

  4. False claims in construction, where a contractor submits inflated invoices to a government owner, may subject the contractor to liability under which US federal law?

    Answer: False Claims Act (31 U.S.C. § 3729)

    The False Claims Act imposes civil and criminal penalties on those who knowingly submit fraudulent claims for payment to the federal government.

  5. A construction auditor finds that a sole-source contract was awarded without documented justification. The primary risk this represents is:

    Answer: Loss of competitive pricing and potential favoritism or fraud

    Undocumented sole-source awards bypass competitive safeguards and can mask favoritism, kickbacks, or inflated pricing.

  6. Which technique involves auditors selecting and confirming a random sample of material deliveries directly with suppliers to detect fictitious charges?

    Answer: Accounts payable confirmation

    Accounts payable confirmation involves directly contacting suppliers to verify that billed deliveries actually occurred, detecting phantom invoices.