CCA Fraud Detection and Prevention in Construction

Question 1

Which fraud scheme involves a construction contractor billing the owner for materials at inflated prices while receiving a secret kickback from the supplier?

Accepted Answer

Vendor kickback scheme

Answer

A vendor kickback scheme occurs when a contractor receives undisclosed financial benefits from a supplier in exchange for awarding business or approving inflated invoices.

Question 2

In the context of the Fraud Triangle, which element describes a contractor's ability to commit fraud due to weak internal controls?

Accepted Answer

Opportunity

Answer

Opportunity is the element of the Fraud Triangle that refers to the circumstances—such as weak controls—that allow fraud to occur.

Question 3

A construction auditor reviewing payroll records discovers several employees with identical bank account numbers. This is a red flag for:

Accepted Answer

Ghost employee scheme

Answer

Duplicate bank account numbers on payroll records suggest ghost employees—fictitious workers whose paychecks are deposited into an accomplice's account.

Question 4

Which procurement fraud scheme involves competitors secretly agreeing on which company will win a bid while others submit intentionally losing bids?

Accepted Answer

Bid rotation (bid rigging)

Answer

Bid rotation is a form of bid rigging where competitors take turns winning contracts while the others submit cover bids to create the appearance of competition.

Question 5

Which data analytics technique is most effective for identifying unusual patterns of round-dollar invoices in a construction project?

Accepted Answer

Benford's Law analysis

Answer

Benford's Law predicts natural digit distribution in large datasets; deviations—such as clusters of round numbers—can indicate fabricated invoices.

(CCA) Certified Construction Auditor Practice Test

(CCA) Certified Construction Auditor Practice Test

CCA Fraud Detection and Prevention in Construction