PCI PCI Risk Assessment & Loss Prevention 2 — Questions and Answers
Question 1: What is internal theft in the context of corporate loss prevention?
- Theft committed by employees or other insiders against their employer (Correct answer)
- Theft of intellectual property by a competitor
- Theft of physical assets during a break-in
- Unauthorized access to computer systems by external hackers
Correct answer: Theft committed by employees or other insiders against their employer
Internal theft is committed by employees, contractors, or other insiders who exploit their trusted access to steal assets, data, or funds from their employer.
Question 2: What does pre-employment screening help prevent in an organizational context?
- Hiring individuals with histories of dishonesty or misconduct who pose risks (Correct answer)
- Discrimination claims during the hiring process
- High employee turnover in the first year of employment
- Conflicts between hiring managers and HR departments
Correct answer: Hiring individuals with histories of dishonesty or misconduct who pose risks
Pre-employment screening identifies candidates with disqualifying histories of theft, fraud, or misconduct, reducing the risk of internal crime before it occurs.
Question 3: What is an anonymous tip line or hotline in the context of loss prevention?
- A confidential reporting mechanism for employees to report suspected misconduct (Correct answer)
- A direct phone line to law enforcement for emergency response
- A customer service line for reporting shoplifting incidents
- A system for monitoring internal network traffic
Correct answer: A confidential reporting mechanism for employees to report suspected misconduct
Anonymous hotlines allow employees to report suspected fraud or misconduct without fear of retaliation, making them a key tool in fraud detection and loss prevention programs.
Question 4: What is exception reporting in retail loss prevention?
- Automated flagging of unusual transactions or activities that deviate from normal patterns (Correct answer)
- Reporting inventory exceptions to management on a monthly basis
- Documenting the reasons for merchandise returns
- Tracking sales that fall below expected targets
Correct answer: Automated flagging of unusual transactions or activities that deviate from normal patterns
Exception reporting uses software to automatically flag transactions that fall outside normal parameters, helping identify potentially fraudulent activity for review.
Question 5: What is the fraud triangle model?
- A theory that fraud requires opportunity, pressure, and rationalization (Correct answer)
- A three-step process for investigating financial fraud
- A diagram showing the three types of financial fraud
- A model for organizing a fraud investigation team
Correct answer: A theory that fraud requires opportunity, pressure, and rationalization
The fraud triangle, developed by criminologist Donald Cressey, posits that fraud occurs when a person has opportunity, faces financial pressure, and can rationalize their actions.
Question 6: What is a due diligence investigation in the context of business risk management?
- A comprehensive investigation of a company or individual before a business transaction (Correct answer)
- A routine audit of internal financial controls
- A legal review of contracts before signing
- A background check limited to criminal history only
Correct answer: A comprehensive investigation of a company or individual before a business transaction
Due diligence investigations thoroughly examine a company's or individual's background, finances, and reputation to identify risks before entering into business relationships.
PCI PCI Risk Assessment & Loss Prevention 2
What is internal theft in the context of corporate loss prevention?