CGAP Internal Controls and Fraud Detection in Government

Question 1

What is the primary framework used by U.S. federal agencies to evaluate and report on internal controls?

Accepted Answer

GAO's Standards for Internal Control in the Federal Government (Green Book)

Answer

COSO Enterprise Risk Management Framework

Answer

ISO 31000 Risk Management Standard

Answer

COBIT Framework for IT Governance

Question 2

Which of the five components of internal control in the Green Book focuses on management's attitudes and commitment to integrity?

Accepted Answer

Control Environment

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring

Question 3

What is 'segregation of duties' as an internal control principle?

Accepted Answer

Dividing key tasks among different individuals so no single person can perpetrate and conceal an error or fraud

Answer

Rotating employees between departments annually

Answer

Separating financial records by fiscal year

Answer

Assigning different supervisors to different teams

Question 4

In the fraud triangle, which element refers to the justification a fraudster uses to rationalize their behavior?

Accepted Answer

Rationalization

Answer

Pressure

Answer

Opportunity

Answer

Incentive

Question 5

Which type of fraud involves government employees submitting claims for goods or services not received?

Accepted Answer

Fictitious vendor scheme

Answer

Bid rigging

Answer

Ghost employee scheme

Answer

Payroll padding

Question 6

What is a 'compensating control'?

Accepted Answer

A secondary control that mitigates risk when a primary control cannot be implemented

Answer

A control that rewards employees for good performance

Answer

A financial control that calculates employee compensation

Answer

A detective control that compensates for preventive control failures