CIA CIA Fraud Detection & Prevention

Question 1

According to the fraud triangle, which three elements must be present for fraud to occur?

Accepted Answer

Pressure, opportunity, and rationalization

Answer

Motive, skill, and access

Answer

Greed, access, and collusion

Answer

Incentive, knowledge, and deception

Question 2

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

Accepted Answer

Asset misappropriation

Answer

Financial statement fraud

Answer

Corruption schemes

Answer

Bribery and kickbacks

Question 3

A 'lapping' scheme in accounts receivable involves:

Accepted Answer

Stealing customer payments and covering the shortage with later receipts

Answer

Inflating revenue by recording fictitious sales

Answer

Writing off valid receivables as uncollectible

Answer

Issuing duplicate invoices to customers

Question 4

Which internal control is most effective at preventing check tampering fraud?

Accepted Answer

Independent bank reconciliation performed by someone not involved in check preparation

Answer

Monthly bank reconciliations performed by the check preparer

Answer

Requiring dual signatures on all checks

Answer

Storing blank checks in an unlocked drawer for efficiency

Question 5

A 'ghost employee' scheme typically involves:

Accepted Answer

Adding fictitious employees to the payroll and diverting their paychecks

Answer

Paying a real employee for hours not worked

Answer

Underreporting employee count to reduce payroll taxes

Answer

Misclassifying employees as independent contractors

Question 6

Under IIA Standards, when an internal auditor discovers fraud during an audit, the auditor should first:

Accepted Answer

Report findings to the audit committee or appropriate level of management

Answer

Immediately confront the employee suspected of fraud

Answer

Close the audit and issue a clean opinion

Answer

Terminate the engagement until legal counsel is retained