CPI Financial Investigation & Fraud Detection 3

Question 1

The 'fraud triangle' identifies three conditions that must be present for occupational fraud to occur. These are:

Accepted Answer

Pressure, opportunity, and rationalization

Answer

Motive, means, and opportunity

Answer

Intent, capability, and access

Answer

Greed, opportunity, and concealment

Question 2

A forensic audit differs from a standard financial audit primarily because it:

Accepted Answer

Is conducted specifically to gather evidence suitable for use in legal proceedings

Answer

Focuses only on tax compliance and reporting accuracy

Answer

Reviews only the most recent fiscal year's transactions

Answer

Requires CPA licensure and is performed exclusively by public accounting firms

Question 3

Which professional certification is most directly relevant to an investigator specializing in financial fraud and forensic accounting?

Accepted Answer

Certified Fraud Examiner (CFE)

Answer

Certified Information Systems Auditor (CISA)

Answer

Certified Public Accountant (CPA)

Answer

Certified Internal Auditor (CIA)

Question 4

What is 'skimming' in the context of occupational fraud?

Accepted Answer

Stealing cash from an organization before it is recorded in the books

Answer

Diverting funds after they have been recorded in the accounting system

Answer

Inflating expense reimbursement claims with personal expenditures

Answer

Transferring funds to an unauthorized offshore bank account

Question 5

When analyzing financial records for fraud, 'horizontal analysis' involves:

Accepted Answer

Comparing financial figures across multiple time periods to identify unusual trends or changes

Answer

Expressing each line item as a percentage of total revenue or assets

Answer

Comparing a company's ratios against industry benchmarks

Answer

Reviewing transactions across different departments simultaneously

Question 6

A Currency Transaction Report (CTR) must be filed by financial institutions for cash transactions exceeding what threshold?

Accepted Answer

$10,000

Answer

$5,000

Answer

$7,500

Answer

$25,000

Question 7

Which practice, known as 'structuring' or 'smurfing,' is itself a federal crime under U.S. law?

Accepted Answer

Breaking large cash deposits into smaller amounts to avoid CTR filing requirements

Answer

Filing multiple tax returns under different Social Security numbers

Answer

Routing wire transfers through multiple foreign banks to obscure their origin

Answer

Using nominees to hold assets on behalf of an undisclosed beneficial owner