CIA CIA Fraud Detection & Prevention 1

Question 1

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

Accepted Answer

Pressure, opportunity, and rationalization

Answer

The fraud triangle identifies pressure (incentive), opportunity (weak controls), and rationalization (justification) as the three conditions enabling fraud.

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

Asset misappropriation is by far the most common category of occupational fraud, accounting for the majority of reported cases.

Question 3

A 'lapping' scheme in accounts receivable involves:

Accepted Answer

Stealing customer payments and covering the shortage with later receipts

Answer

Lapping is a fraud where an employee steals cash receipts and conceals the theft by applying subsequent payments to earlier accounts.

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

An independent bank reconciliation performed by someone separate from check preparation detects unauthorized disbursements.

Question 5

A 'ghost employee' scheme typically involves:

Accepted Answer

Adding fictitious employees to the payroll and diverting their paychecks

Answer

A ghost employee scheme involves adding non-existent workers to payroll so the fraudster can intercept or redirect those payments.

CIA - Certified Internal Accountant Practice Test

CIA - Certified Internal Accountant Practice Test

CIA CIA Fraud Detection & Prevention 1