Forensic Accounting and Fraud Examination Coursera Quiz Answers 2022 | All Weeks Assessment Answers [💯Correct Answer]

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About Forensic Accounting and Fraud Examination Course

In this course we are going to help you answer the questions: who commits fraud, why and how. We’ll also help you develop skills for catching them.

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Forensic Accounting and Fraud Examination Quiz Answers

Week 01: Forensic Accounting and Fraud Examination Coursera Quiz Answers

Q1. Which of the following correctly reflects the common law understanding of fraud.

  • Fraud and corruption are basically the same crime.
  • Fraud can encompass any crime for gain that uses deception as its principal technique.
  • Fraud has three critical elements in most state courts but four elements at the federal level.
  • Common law prevents persons under 18 to be victims of fraud.

Q2. In terms of frequency of occurrence, the largest category of fraud is which of the following:

  • Asset misappropriation
  • Corruption
  • Financial reporting fraud, also known as financial statement fraud
  • Ponzi schemes such as the $60 billion Madoff fraud

Q3. Which of the following is the most likely reason, as suggested by Cressey, that an employee tries to solve a financial problem in secret?

  • because they are afraid they will have to go back to college.
  • because they worry that someone else will want part of the money they steal.
  • because they are afraid of losing the approval of those around them.
  • because they are afraid of getting arrested.

Q4. In this week, we introduce the Accidental Fraudster. Which of the following represent skills required to be a successful forensic professional and fraud examiner? (Mark all that apply .)

  • Technical competency.
  • Investigative proficiency.
  • Critical thinking.

Q5. Common violations pertaining to occupational fraud and abuse include all of the following except:

  • asset misappropriation.
  • corruption.
  • financial reporting fraud.
  • All of these are common violations.

Q6. From the list below, create the typical fraud perpetrator profile.

  • Male, high school education, young, general labor, and with the company for years.
  • Female, high school education, young, general labor, and relatively new to the company.
  • Male, post-secondary education, middle aged, professional, and with the company for years.
  • Female, post-secondary education, middle aged, professional, and relatively new to the company.

Q7. The interrelationship among auditing, fraud examination, and financial forensics is:

  • constant even while social and cultural pressures are exerted on it.
  • based on the SOX Act and SAS 99.
  • established and maintained by legal structures and justice processes.
  • dynamic and changes over time.

Q8. While a fraud examiner’s objective is to determine whether fraud has occurred and who is likely responsible, the financial forensics investigator’s objective is to:

  • determine whether the allegations are reasonable based on both the financial and non-financial evidence.
  • gather the required financial and nonfinancial evidence to examine the allegations independently and determine their accuracy.
  • calculate financial impact based on a specific formula(s).
  • attempt to gather sufficient evidence to support or refute an audit opinion.

Q9. Which of the following is not one of the three-pronged processes of remediation?

  • The modification of operational processes, procedures, and internal controls to minimize the chances of a similar fraud recurring.
  • The prevention and detection of a fraud that has already occurred.
  • The recovery of losses through insurance, the legal system, or other means.

Support for the legal process as it tries to resolve the matter in the legal environment.

Q10. Which of the following statements is correct with regard to collusion?

  • Collusion is seldom responsible for management’s ability to override the system of internal control
  • Collusion is involved in almost all frauds
  • Frauds involving collusion are difficult to detect.
  • Collusion is not an aspect of opportunity.

Q1. To understand the importance of fraud, one should understand the losses that occur due to fraud each year. According to ACFE estimates, worldwide, how much is annually lost due to fraud?

  • US $60 billion
  • US $1 trillion
  • US 3.5 trillion

Q2. In this week, we introduce the Accidental Fraudster. Which of the following represent skills required to be a successful forensic professional and fraud examiner? (Mark all that apply .)

  • Technical competency.
  • Investigative proficiency.
  • Critical thinking.

Q3. Pressure is a form of motive.

  • False
  • True

Q4. Which of the following is NOT recognized by the ACFE as a behavioral warning sign?

  • Complained about lack of authority
  • Refusal to take vacations
  • Financial difficulties
  • New marriage or significant relationship

Q5. Please identify the most correct statement with respect to fraud victims:

  • Large public companies, in many cases, cannot afford to become victims of fraud because they are victimized so frequently.
  • Fraud victims are generally male, middle-aged, and respected members of their community before the fraud is discovered.
  • Small businesses and particularly small charities and not-for-profits, in many cases, cannot afford to become victims of fraud.
  • Fraud perpetrators are generally female, lower income, single moms attempting to put meals on the table for their family.

Q6. As legitimate compensation increases, the losses associated with perpetrators generally rise. This relationship is most likely because a perpetrator frequently:

  • has greater access to company funds and assets.
  • can coerce others into the scheme.
  • develops a higher cost of status and image.
  • acquires a greater appreciation of costly pleasures.

Q7. The person most responsible for the creation of the fraud triangle.

  • Noted sociologist and criminologist Donald Cressey.
  • Noted alleged fraudster Bernard Madoff (Ponzi Scheme).
  • Noted alleged fraudster Thomas Coughlin (Wal-Mart)
  • “Fraudster Man”, built on the ACFE profile of the fraudster developed from the Reports to the Nations, led to the creation of the fraud triangle.

Q8. With regard to the fraud triangle, which of the following statements is correct?

  • The fundamental premise of the Fraud Triangle suggests that when an ordinary person, or accidental fraudster, commits fraud, all three of the legs of the triangle must be present.
  • Pressure is the most critical and dominant attribute of the fraud triangle and the only one that must be present for a fraud to occur
  • Opportunity is the most critical and dominant attribute of the fraud triangle and the only one that must be present for a fraud to occur
  • Pressure and opportunity are the most critical and dominant attributes of the fraud triangle and the only ones that must be present for a fraud to occur

Q9. With regard to auditing, fraud examination and forensic accounting, which statement is correct?

  • The three disciplines of auditing, fraud examination and forensic accounting seldom interact.
  • Most audits lead to fraud indicators that require fraud investigation
  • The risk assessment aspect of auditing require the use of forensic accounting and fraud examination
  • Auditing, fraud examination and forensic accounting sometimes overlap, depending on the nature and extent of facts and circumstances observed.

Q10. While a fraud examiner’s objective is to determine whether fraud has occurred and who is likely responsible, the financial forensics investigator’s objective is to:

  • attempt to gather sufficient evidence to support or refute an audit opinion.
  • determine whether the allegations are reasonable based on both the financial and non-financial evidence.
  • gather the required financial and nonfinancial evidence to examine the allegations independently and determine their accuracy.
  • calculate financial impact based on a specific formula(s).

Q11. Which of the following statements is correct with regard to collusion?

  • Collusion is not an aspect of opportunity.
  • Collusion is involved in almost all frauds
  • Collusion is seldom responsible for management’s ability to override the system of internal control
  • Frauds involving collusion are difficult to detect.

Week 02: Forensic Accounting and Fraud Examination Coursera Quiz Answers

Q1.  One major difference between fraud and a mistake is:

  • Concealment
  • Cover-up
  • The act
  • Conversion (benefit to the perpetrator)

Q2. Which if the following is usually correct, concerning a predator?

  • Predators are less likely to be a concern for auditors because auditors are not fraud examiners.
  • Predators are probably more comfortable dealing with authorities and anti-fraud mechanisms, like audits, than accidental fraudsters are.
  • The predator steals within one year of arriving at an organization.
  • Chief Executive and Chief Financial Officers could never be predators because of their respect in the business world.

Q3. Capability as an attribute of fraudsters is most closely associated with which of the following

  • Technical competency
  • Intelligence, position, ego, and the ability to deal well with stress
  • Investigative proficiency
  • Thinking critically

Q4. With regard to internal controls, which of the following would generally not be considered an internal control for payroll.

  • Use of time cards
  • Passwords to log into computers
  • Identification cards to record when employees start and end a job task
  • Cameras to record activities at the workplace.

Q5. Fraud deterrence begins:

  • with the employer’s internal controls.
  • in the employee’s mind.
  • with the fraud examination.
  • with regulatory and legal actions such as PCAOB Auditing Standard No. 5, AICPA Statement on Auditing Standards (SAS) No. 99, and the Sarbanes–Oxley Act.

Q6. The Fraud Diamond has which of the following attributes added to the Fraud Triangle

  • Integrity
  • Concealment
  • Capability
  • Conversion

Q7.Overall, management must design, implement, and maintain:

  • an internal controls program to protect entity assets, liabilities, and owners’ equity.
  • internal controls to support effective and efficiency of operations, reliability of reporting, and compliance with laws and regulations.
  • an automated accounting system that implements each component of U.S. GAAP accounting principles.
  • All of the choices are correct.

Q8. One of the main findings of Donald Cressey is the following observation.

  • Cressey found that for a large number of people, they commit fraud because they have a financial need
  • Cressey created the fraud triangle
  • Cressey found both integrity and rationalization problems in fraudsters but concluded that rationalization was the greater weakness.
  • Cressey concluded that opportunity such as weak internal controls led normally law-abiding persons to commit fraud acts.

Q9. Signs that an individual is a predator fraudster include:

  • Frequent job turnover caused by boredom.
  • All of the other answers are correct.
  • Repeat offenses.
  • Takes advantage of sudden opportunity.

Q10.With regard to segregation of duties, which of the following is not one of the four major functions

  • authorizing
  • correcting
  • recording
  • safeguarding

Q1. One of the main findings of Donald Cressey is the following observation.

  • Cressey found that for a large number of people, they commit fraud because they have a financial need
  • Cressey created the fraud triangle
  • Cressey found both integrity and rationalization problems in fraudsters but concluded that rationalization was the greater weakness.
  • Cressey concluded that opportunity such as weak internal controls led normally law-abiding persons to commit fraud acts.

Q2. Which of the following is NOT an attribute of the “predatory” fraud triangle.

  • Opportunity
  • Arrogance
  • Criminal mindset
  • Rationalization

Q3. Conversion can be shown to have occurred by:

  • Tracing the money to the defendant’s care
  • Tracing the money to the defendant’s department
  • Tracing the money to the defendant’s bank account
  • All of the above

Q4. The Fraud Diamond has which of the following attributes added to the Fraud Triangle

  • Concealment
  • Capability
  • Conversion
  • Integrity

Q5. Overall, management must design, implement, and maintain:

  • an internal controls program to protect entity assets, liabilities, and owners’ equity.
  • internal controls to support effective and efficiency of operations, reliability of reporting, and compliance with laws and regulations.
  • an automated accounting system that implements each component of U.S. GAAP accounting principles.
  • All of the choices are correct.

Q6. Albrecht developed the fraud scale, which includes the following components:

  • situational pressures, perceived opportunity, and personal integrity.
  • high personal debt, living beyond one’s means, drug or alcohol problems.
  • situational pressures, personal integrity, and criminal record.
  • None of the above are the components for the fraud scale.

Q7. Which of the following is true of the Dorminey et al “meta-model”

  • Fraud prevention, deterrence and detection attempt to form a barrier between would the “would-be” fraudster and the execution of the fraud.
  • The triangle of fraud action including the act, concealment and conversion do NOT play a role in the meta-model
  • The fraud triangle including the pressure, opportunity and rationalization do NOT play a role in the meta-model
  • Fraud prevention, deterrence and detection do NOT play a role in the meta-model

Q8. Why are preventative controls preferred (if cost effective )?

  • They almost always discover the cash that is missing.
  • They help recover the losses that can be anticipated
  • They keep losses from occurring.

Q9. With regard to segregation of duties, which of the following is not one of the four major functions

  • authorizing
  • correcting
  • recording
  • safeguarding

Q10. Three of the various objectives of an internal control program are:

  • fraud prevention, fraud deterrence, and fraud mitigation.
  • fraud prevention, fraud deterrence, and fraud detection.
  • fraud deterrence, fraud detection, and fraud prosecution.
  • fraud elimination, fraud deterrence, and fraud mitigation.

Week 03: Forensic Accounting and Fraud Examination Coursera Quiz Answers

Q1. What is the INCORRECT statement about fraud detection?

  • Perception of detection is consistent with adequate controls in place to stop a particular risk.
  • One of the keys of fraud prevention is the concept of “perception of detection.”
  • Perception of Detection relies on employees knowing with 100% certainty that if they commit fraud, they will be caught.
  • When employees and vendors know that an organization is conducting vigorous tests to detect fraud, it may cause them to think twice about committing it.

Q2. A fraudster erases files from his hard drive. This is an example of data alteration.

  • True
  • False

Q3. When looking for fraud, credit card companies constantly mine data and look for transactions that are similar to historical patterns of fraud. Which of the following are examples of patterns that they use. (May have more than one correct answer)

  • A. Purchases of electronic items at a retailer in a large metropolitan area.
  • B. Multiple purchases at a store in a relatively short period of time.
  • Large purchases of “high-risk” items at a retailer from which the card holder has not previously purchased.

Q4. Which of the following statements about adjusting journal entries is NOT correct?

  • Adjusting journal entries, especially those that increase income and increase assets or decrease liabilities should receive greater scrutiny by auditors.
  • Adjusting journal entries, especially those that are significant in amount, close to year end and increase income should receive greater scrutiny by auditors.
  • Unusual, significant, one-time adjusting journal entries are seldom cause for greater scrutiny by auditors.
  • Auditors will often review adjusting journal entries, giving greater scrutiny to those increasing income.

Q5. Anomalies are

  • most often red flags that indicate fraud is present.
  • part of the day-to-day operations for most companies.
  • seldom seen in companies with good internal controls and procedures.

Q6. Analytical anomalies include all of the following except:

  • explained cash shortages.
  • excessive purchases.
  • excessive debit and credit memos.
  • transactions too small or too large for normal activity.

Q7. Journal entries of concern include:

  • entries made by accounting personnel.
  • entries made by members of senior management.
  • routine accrual entries prepared at year-end.
  • All of the choices are correct.

Q8. Duplicate searches in data extraction and analysis software could be used to discover:

  • Invoices that have been paid twice
  • Missing employees
  • Missing invoices
  • Stolen inventory

Q9. Which of the following best describes text analysis?

  • a targeted approach to fraud detection that searches for emotion in text.
  • a systems-type approach to fraud detection relying on the text of the software code.
  • data mining tools such as Access, ACL, or IDEA that identify obscure relationships.
  • an approach to infer meaning from words and phrases and the way in which they are used.

Q10. Which of the following is most accurate with regard to files deleted from a computer’s hard drive prior to the arrival of fraud examiners or forensic accountants?

  • The data is lost and as a result to perpetrator may get away with their crime.
  • It is an effective tool for perpetrators who are close to getting caught to hide their crimes.
  • Always turn on all computers and electronic devices when you arrive at a crime scene to retrieve deleted data and files.
  • Contemporary computer programs almost always allow deleted data and files to be successfully retrieved.

Q1. Sources of information include:

  • Witnesses to an act of fraud.
  • Surveillance by private detectives.
  • Surveillance by police officers.
  • All of the above

Q2. With regard to financial data analysis and effective fraud detection, which of the following statements is INACCURATE.

  • Historical comparisons are extremely important.
  • If there is an unexplained and dramatic increase in an item from one period to the next, it is a red flag, or badge, that indicates fraud.
  • Financial data analysis is an extremely sophisticated endeavor.
  • Not only is necessary to understand what data is available and how to capture it, but you also have to know what you are looking for.

Q3. When looking for fraud, credit card companies constantly mine data and look for transactions that are similar to historical patterns of fraud. Which of the following are examples of patterns that they use. (May have more than one correct answer)

  • Purchases of electronic items at a retailer in a large metropolitan area.
  • Multiple purchases at a store in a relatively short period of time.
  • Large purchases of “high-risk” items at a retailer from which the card holder has not previously purchased.

Q4. Which of the following statements about adjusting journal entries is NOT correct?

  • Adjusting journal entries, especially those that increase income and increase assets or decrease liabilities should receive greater scrutiny by auditors.
  • Adjusting journal entries, especially those that are significant in amount, close to year end and increase income should receive greater scrutiny by auditors.
  • Unusual, significant, one-time adjusting journal entries are seldom cause for greater scrutiny by auditors.
  • Auditors will often review adjusting journal entries, giving greater scrutiny to those increasing income.

Q5. Red flags, symptoms of fraud, often go unnoticed or are not vigorously pursued because:

  • there is not supporting evidence of fraud.
  • the red flags are not associated with financial statement preparation.
  • the audit committee is involved in other investigations.
  • there are many red flags in day-to-day operations that are not fraud indicators.

Q6. Journal entries of concern include:

  • entries made by accounting personnel.
  • entries made by members of senior management.
  • routine accrual entries prepared at year-end.
  • All of the choices are correct.

Q7. Which of the following software tools cannot be used in “big data” analysis.

  • IDEA
  • Camtasia
  • Microsoft Excel
  • SAS

Q8. With regard to text analysis, which of the following is NOT correct:

  • Data exists in many forms and in many locations.
  • Public records, despite their availability, are not generally a reliable source of information.
  • Social media can lead to valuable information about individuals or businesses
  • Company policies often allow for search of personal electronic devices such as smart phones and tablets

Q9. The functions of data extraction and analysis software tools include all EXCEPT:

  • Sorting
  • Input into payroll system
  • Verifying multiples of a number
  • Correlations analysis

Q10. Which is the following statements with regard to the WorldCom fraud is NOT accurate?

  • Top WorldCom management, trying to show increasing profits, in a competitive and turbulent market, resorted to demanding the manipulation of accounts through a series of adjusting journal entries.
  • WorldCom continues to be known as a classic case of financial statement fraud.
  • The central part of internal auditor Cynthia Cooper’s WorldCom investigation involved “big data” analysis in order to avoid having to manually review documents.
  • There were many warning signs of problems at WorldCom, but ultimately, tips investigated by internal auditors brought the fraud into the open.

Q11. Which of the following best describes text analysis?

  • a targeted approach to fraud detection that searches for emotion in text.
  • data mining tools such as Access, ACL, or IDEA that identify obscure relationships.
  • a systems-type approach to fraud detection relying on the text of the software code.
  • an approach to infer meaning from words and phrases and the way in which they are used.

Q12. With regard to financial data analysis and effective fraud detection, which of the following statements is INACCURATE.

  • Historical comparisons are extremely important.
  • If there is an unexplained and dramatic increase in an item from one period to the next, it is a red flag, or badge, that indicates fraud.
  • Financial data analysis is an extremely sophisticated endeavor.
  • Not only is necessary to understand what data is available and how to capture it, but you also have to know what you are looking for.

Week 04: Forensic Accounting and Fraud Examination Coursera Quiz Answers

Q1. The three V’s of money laundering include all except the following:

  • Velocity
  • Venue
  • Volume
  • Vacuum

Q2. The three V’s of money laundering include all but the following:

  • How do you quickly move large amounts of cash
  • How can you disguise value
  • The de-materialization of money
  • How can you exploit locations, venue, that provides privacy protection

Q3. The Mexico City mansion cash seizure resulted in how much United States currency:

  • $206 million
  • The Mexico City cash seizure was actually from a drug smuggling tunnel.
  • $20.6 million
  • $2.6 billion

Q4. The biggest advantage investigators have when tracing the flow of illegal funds is:

  • Most illegal funds consist of electronic transfers, making detection easier.
  • Most illegal funds at some time flow through a bank in the US making detection easier.
  • Most illegal funds return to the persons performing the laundering making detection easier.
  • Most illegal funds are converted to hard assets making detection easier

Q5. Which of the following are the three stages of money laundering? (Mark all that apply)

  • Assessment
  • Integration
  • Layering
  • Placement

Q6. Select the following item(s) that are reasons that people launder money:

  • To disguise illegal activities such as bribery, illegal drug proceeds, or fraud
  • To avoid using cash for large purchases (which might be detected)
  • To avoid personal liabilities (such as bankruptcy, judgments, or divorce settlements)

Q7. Barney Drum travels with large sums of cash for deposit in foreign bank accounts. This may be a method for hiding assets.

  • True
  • False

Q8. Which of the following methods is used to make detection of persons responsible for money laundering more difficult?

  • The use of electronic bank transfers
  • The use of cashier’s checks
  • The use of commercial checks
  • All of the above

Q9. Generally, what is the best estimate of the impact of money laundering?

  • 2% to 5% of the world’s GDP
  • 2% to 5% of the developed world’s GDP
  • 2% to 5% of the United State’s GDP
  • 2% to 5% of organized crime activities

Q10. A shell company generally refers to limited liability or other business entity with no significant assets or ongoing business activities.

  • True
  • False

Q1. When looking for money laundering methods, the forensic examiner should consider which of the following as alternatives to cash : (Mark all that apply)

  • Bitcoin
  • Gift cards
  • Disguised precious metals
  • Airline frequent traveler miles

Q2. The Mexico City mansion cash seizure resulted in how much United States currency:

  • $2.6 billion
  • The Mexico City cash seizure was actually from a drug smuggling tunnel.
  • $20.6 million
  • $206 million

Q3. The biggest advantage investigators have when tracing the flow of illegal funds is:

  • Most illegal funds consist of electronic transfers, making detection easier.
  • Most illegal funds at some time flow through a bank in the US making detection easier.
  • Most illegal funds return to the persons performing the laundering making detection easier.
  • Most illegal funds are converted to hard assets making detection easier.

Q4. Which of the following are the three stages of money laundering? (Mark all that apply)

  • Assessment
  • Integration
  • Layering
  • Placement

Q5.  Assuming standard packs of 50 $20 bills contained within a wrapper of money, what is the maximum amount of money that can be carried in a normal-size briefcase (attaché’ case)?

  • $1,000
  • $10,000
  • $200,000
  • $1,000,000

Q6. Barney Drum travels with large sums of cash for deposit in foreign bank accounts. This may be a method for hiding assets.

  • True
  • False

Q7.  With regard to emerging payments methods and money laundering, which of the following statements is NOT correct?

  • Money is now easily stored on cards.
  • Bulk cash smuggling is a new technique because of recent enhancement of anti-money laundering laws.
  • Mobile phones can also be used to store funds and make purchases.
  • Some banks are now issuing prepaid debit cards with funds from the deposit holder’s account

Q8. With regarding to changes pertaining to money laundering, which of the following change is NOT a concern to those in the battle against money laundering?

  • De-materialization of money – Anything of value – goods and services (real estate, jewels, precious metals, on-line accounts)
  • New forms of value – loyalty points traded for drugs
  • Dis-intermediation – banks not center of transactions – e.g., bit-coin
  • All of the above are concerns for law enforcement

Q9. The traditional technique in money laundering has been to keep the money in the country.

  • True
  • False

Q10. The three V’s of money laundering include all but the following:

  • How do you quickly move large amounts of cash
  • How can you disguise value
  • The de-materialization of money
  • How can you exploit locations, venue, that provides privacy protection

Q11. With regard to pipe wrenches used in money laundering, which of the following statements are correct?

  • The pipe wrench used in the money laundering scheme was actually gold and accidentally discovered in a hardware store.
  • None of the statements are true
  • The pipe wrench used in the money laundering scheme was actually gold
  • The pipe wrenches used in the money laundering scheme were the same as one can purchase from a hardware store.

Q12. Transferring funds obtained illegally from a safe deposit box in the US to a safe deposit box in Canada is an example of:

  • Integration
  • Layering
  • Placement
  • None of the above

Q13. Shell companies can be found through:

  • All of the above
  • A lifestyle / spending habits audit
  • Examination of ownership records in a country known to harbor and protect criminal activities
  • Examination of parental trust accounts

Q14.  With regard to changes pertaining to money laundering, which of the following changes is NOT a concern to those in the battle against money laundering?

  • bit-coin and other forms of “electronic money”
  • prepaid value cards (e.g., Visa debit card)
  • mobile payments
  • All of the above are a concern for law enforcement

Q15. A shell company generally refers to limited liability or other business entity with no significant assets or ongoing business activities.

  • True
  • False

Q16. Which of the following is correct, when considering the phrase “Following the money”?

  • Requires knowledge of every place the money has been
  • Is often difficult to do given the use of foreign banks for layering
  • Often requires access to foreign bank accounts
  • All of the choices are correct.

Q17. With regard to specified unlawful acts, which of the following is one such act:

  • Burning one’s business location for insurance proceeds.
  • Making an untrue statement to representatives of law enforcement
  • Writing a novel with fictional characters and mailing it to readers
  • Making an untrue statement to representatives of the federal government

Q18. Shell companies typically: (Mark all that apply)

  • Are illegal
  • Have no physical presence (other than a mailing address)
  • Have no employees
  • Produce no independent economic value

Q19. The Mexico City mansion cash seizure resulted in how much United States currency:

  • Enough to pave all the roads in Mexico
  • Enough to pave all the major highways in Mexico
  • Enough to fill-in all the illegal smuggling tunnels between the United States and Mexico
  • Enough to fund the Mexican Senate

Q20. Money laundering is the disguising of the existence, nature, source, ownership, location, and disposition of property derived from criminal activity.

  • True
  • False

Q21. The conversion of illegal funds that have been moved to disguise its origin, to assets which appear to be derived from legal sources, is which step in the money laundering process?

  • Layering
  • Placement
  • Integration
  • None of the other choices are correct

Q22. Which of the following is NOT true?

  • The process of money laundering is a criminal activity
  • Sometimes laundered money to supports terrorism
  • Laundered money is estimated to be trillions of dollars annually
  • Money laundering is a victimless crime

Q23. Select the following item(s) that are reasons that people launder money:

  • To disguise illegal activities such as bribery, illegal drug proceeds, or fraud
  • To avoid using cash for large purchases (which might be detected)
  • To avoid personal liabilities (such as bankruptcy, judgments, or divorce settlements)

Q24.  With regard to emerging payments methods and money laundering, the parallel banking system, not tied to any country or government, is of significant concern to the anti-money laundering community.

  • True
  • False

Q25. Generally, what is the best estimate of the impact of money laundering?

  • 2% to 5% of the world’s GDP
  • 2% to 5% of the developed world’s GDP
  • 2% to 5% of the United State’s GDP
  • 2% to 5% of organized crime activities

Q26. How would an investigator detect an offshore bank account made by a drug dealer?

  • Through testimony of company personnel
  • By tracing money transfers out of the country
  • Through testimony of neighbors
  • Through suspicion of ill-gotten gains

Q27. One method of hiding assets is to:

  • Place them in a savings account.
  • Place them in two separate bank accounts.
  • Place the ownership of the assets in a child’s trust.
  • All of the other answers are correct

Week 05: Forensic Accounting and Fraud Examination Coursera Quiz Answers

Q1. The acronym “M.I.C.E.”, as typical motivations of fraud perpetrators, stands for:

  • Money, Image, Capability, and Environment.
  • Money, Ideology, Coercion, and Environment.
  • Motive, Ideology, Coercion, and Ego.
  • Money, Ideology, Coercion, and Ego.

Q2. Which of the following is an example of financial statement fraud?

  • The sales manager records as a sale in 20X0, goods shipped on January 1, 20X1, the day after year-end.
  • The financial controller capitalizes a large amount of expenses that should have been included on the income statement
  • The CEO insists that the payment for current year bonuses be deferred to the next fiscal year.

Q3. One major difference between fraud and a mistake is:

  • Conversion (benefit to the perpetrator)
  • Concealment
  • Cover-up
  • The act

Q4. Which of the following acts would be considered a fraud act (in contrast to an abuse)?

  • Removing small amounts of cash from the cash register till.
  • Surfing the Internet while at work.
  • Using sick leave to see a child’s play at school.
  • Taking a long lunch or break.

Q5. In terms of the definition of occupational fraud and abuse, who is an employee?

  • Only rank and file workers
  • Any trust violator.
  • Respectable business and professional men.
  • Any person who receives regular and periodic compensation from an organization for his or her labor.

Q6. Fraud can be committed by:

  • intentional misapplication of accounting principles that guide the disclosure of financial information.
  • omission of events, transactions, or other significant information in the notes related to the financial statements.
  • alteration of the underlying accounting data.
  • All of the choices are correct.

Q7. While a fraud examiner’s objective is to determine whether fraud has occurred and who is likely responsible, the financial forensics investigator’s MAIN objective is to:

  • gather the required financial and nonfinancial evidence to examine the allegations independently and determine their accuracy.
  • calculate financial impact based on a specific formula(s).
  • attempt to gather sufficient evidence to support or refute an audit opinion.
  • determine whether the allegations are reasonable based on both the financial and non-financial evidence.

Q8. Signs of pressure that would prompt an individual to commit fraud include:

  • A wealthy brother
  • Success at work
  • A change in home value
  • Both “a” and “c”

Q9. Which of the following is the most likely reason, as suggested by Cressey, that an employee tries to solve a financial problem in secret?

  • because they are afraid of losing the approval of those around them.
  • because they are afraid of getting arrested.
  • because they worry that someone else will want part of the money they steal.
  • because they are afraid they will have to go back to college.

Q10. The Fraud Triangle consists of: pressure, opportunity, and rationalization.

  • True
  • False

Q11. As compensation of the perpetrator increases, the losses associated with the perpetrator rise. This is most likely because:

  • the perpetrator has a greater appreciation of costly pleasures.
  • the perpetrator has greater access to company funds and assets.
  • the perpetrator has a higher cost of status and image.
  • the perpetrator can coerce others into the scheme.

Q12. Which of the following is most accurate concerning a predator?

  • Predators are less likely to be concerned with auditors because auditors are not fraud examiners.
  • Predators are probably more comfortable dealing with authorities and anti-fraud mechanisms, like audits, than accidental fraudsters are.
  • The predator steals within one year of arriving at an organization.
  • Chief Executive and Chief Financial Officers could never be predators because of their respect in the business world.

Q13. Signs that an individual is a predator fraudster include:

  • Repeat offenses.
  • Takes advantage of sudden opportunity.
  • Frequent job turnover caused by boredom.
  • All of the above.

Q14. The difference between a predator fraudster and an accidental fraudster is:

  • The accidental fraudster does not seek opportunity; the predator fraudster does.
  • The predator fraudster is a repeat offender; the accidental fraudster is not.
  • The accidental fraudster is in need of funds; the predator fraudster is not.
  • Both “A” and “B”

Q15. Which of the following is true concerning the fraud scale developed by Albrecht?

  • Situational pressures are not important when integrity is examined in the fraud scale.
  • The fraud diamond and its addition of capability, was based on criticism of both the fraud triangle and fraud scale.
  • Personal integrity was added, and rationalization was deleted from the fraud triangle.
  • None of the above are the components of the fraud scale.

Q16. To improve the effectiveness of the fraud triangle, Wolfe and Hermanson suggests which characteristic as an addition to the fraud triangle (making it the fraud diamond) ?

  • Capability
  • Capacity to steal
  • Integrity
  • Ego or entitlement.

Q17. Large frauds are typically associated with all of the following EXCEPT:

  • Lack of segregation of duties and responsibilities.
  • Placing undeserved trust in key employees.
  • Operating on a crisis basis
  • Working with management to set realistic goals

Q18. Overall, management must design, implement, and maintain:

  • an internal controls program to protect entity assets, liabilities, and owners’ equity.
  • internal controls to support effective and efficiency of operations, reliability of reporting, and compliance with laws and regulations.
  • an automated accounting system that implements each component of U.S. GAAP accounting principles.
  • All of the choices are correct.

Q19. From the statements below select the most correct.

  • Prevention and deterrence are typically more costly than attempting to remediate a fraud that has already occurred.
  • Fraud deterrence refers to creating environments in which people are prohibited from committing fraud.
  • Fraud detection refers to the process of preventing and discovering the presence of fraud.
  • Prevention and deterrence are typically more cost beneficial than attempting to remediate a fraud that has already occurred.

Q20. Three of the various objectives of an internal control program are:

  • fraud prevention, fraud deterrence, and fraud mitigation.
  • fraud prevention, fraud deterrence, and fraud detection.
  • fraud elimination, fraud deterrence, and fraud mitigation.
  • fraud deterrence, fraud detection, and fraud prosecution.

Q21. Why is it difficult for entry-level employees to be forensic accountants?

  • Only senior level employees can know how to run the statistical software used to detect fraud
  • Data are usually only available to senior level employees.
  • There needs to be a level of accounting knowledge of what is normal, to recognize when something is not normal.

Q22. When looking for fraud, credit card companies constantly mine data and look for transactions that are similar to historical patterns of fraud. Which of the following are examples of patterns that they use. (Mark all that apply)

  • Purchases of electronic items at a retailer in a large metropolitan area.
  • Multiple purchases at a store in a relatively short period of time.
  • Large purchases of “high-risk” items at a retailer from which the card holder has not previously purchased.

Q23. Red flags, symptoms of fraud, often go unnoticed or are not vigorously pursued because:

  • there is not supporting evidence of fraud.
  • the red flags are not associated with financial statement preparation.
  • there are many red flags in day-to-day operations that are not fraud indicators.
  • the audit committee is involved in other investigations.

Q24. Duplicate searches in data extraction and analysis software could be used to discover:

  • Invoices that have been paid twice
  • Missing employees
  • Missing invoices
  • Stolen inventory

Q25. Which of the following best describes text analysis?

  • a systems-type approach to fraud detection relying on the text of the software code.
  • a targeted approach to fraud detection that searches for emotion in text.
  • an approach to infer meaning from words and phrases and the way in which they are used.
  • data mining tools such as Access, ACL, or IDEA that identify obscure relationships.

Q26. The Fraud Triangle is generally present when an accidental fraudster commits fraud. The three legs represent perceived or actual instances of concepts. Which of the following is NOT one of the legs of the Fraud Triangle?

  • Opportunity
  • Predictability
  • Pressure
  • Rationalization

Q27. Which of the following is/are applicable to the “Predator”, but not the “Accidental” fraudster? (Mark all that apply)

  • Pressure
  • Opportunity
  • Arrogance
  • Criminal Mindset

Q28. The biggest advantage investigators have when tracing the flow of illegal funds is:

  • Most illegal funds consist of electronic transfers, making detection easier.
  • Most illegal funds at some time flow through a bank in the US making detection easier.
  • Most illegal funds return to the persons performing the laundering making detection easier.
  • Most illegal funds are converted to hard assets making detection easier.

Q29. Which of the following is NOT a concern to those in the battle against money laundering?

  • De-materialization of money – Anything of value – goods and services (real estate, jewels, precious metals, on-line accounts)
  • New forms of value – loyalty points traded for drugs
  • Dis-intermediation – banks not center of transactions – e.g., bit-coin
  • All of the above are concerns for law enforcement

Q30. Which is generally considered the lowest threshold for ethical decision making?

  • A professional code of ethics of an accounting organization.
  • Codes of conduct or directives about what is best for society.
  • The law.
  • The underlying values that guide society.

Q31. With regard to Cynthia Cooper and Betty Vinson, both from WorldCom, which of the following is

  • Cynthia Cooper went to jail for her role in whistle-blowing because she divulged WorldCom trade secrets.
  • Betty Vinson and Cynthia Cooper both went to jail for their roles in blowing the whistle on WorldCom.
  • Betty Vinson, though less celebrated, played an important role in helping Cynthia Cooper uncover and report the WorldCom fraud.
  • Betty Vinson, even though she went to jail for her role in WorldCom, could be considered a victim.

Q32. Which is the following is NOT a best practice for an effective whistleblower program?

  • The tip hotline must be available and publicly known.
  • The tip hotline must be open to any type of inappropriate behavior.
  • Legitimate employee concerns must be taken seriously.
  • The tipster needs to identify themselves because of the need to ask follow-up questions during the investigation.

Q33. With regard to Cynthia Cooper and Betty Vinson, both from WorldCom, which of the following is FALSE?

  • Cynthia Cooper, though celebrated as a hero for her role in WorldCom, suffered no ill effects from her courage and high ethical standards.
  • Cynthia Cooper was named a Time Magazine Person of the Year for her role in whistle-blowing.
  • Betty Vinson and Cynthia Cooper both played important roles in the WorldCom fraud.
  • Betty Vinson, even though she went to jail for her role in WorldCom, could be considered a victim.

Q34. Which of the following are the three stages of money laundering?

  • Assessment
  • Integration
  • Placement
  • Layering

Q35. With regard to changes pertaining to money laundering, which of the following changes is NOT a concern to those in the battle against money laundering?

  • bit-coin and other forms of “electronic money”
  • prepaid value cards (e.g., Visa debit card)
  • mobile payments
  • All of the other choices are a concern for law enforcement

Q36. Financial statement fraud consists of:

  • Recognizing revenues not yet earned
  • Inappropriate entries to reserve accounts
  • Capitalizing expenses when inappropriate
  • All of the other choices are correct

Q37. Financial statement fraud is complex because:

  • More than one account is usually affected
  • More than one person is usually involved
  • Most people do not have access to the source documents and therefore cannot detect the fraud
  • All of the other choices are correct

Q38. Which of the following best describes situations with complex frauds and financial crimes

  • Organizations associated with complex frauds and financial crimes often dismantle legitimate businesses.
  • Organizations associated with complex frauds and financial crimes often involve single individuals acting alone.
  • Organizations associated with complex frauds and financial crime can be described as employing a large number of accidental fraudsters.
  • Organizations associated with complex frauds and financial crime often mix illegal activities with legitimate business activities.

Q39. The functions of data extraction and analysis software tools include all EXCEPT:

  • Sorting
  • Input into payroll system
  • Verifying multiples of a number
  • Correlations analysis

Q40. Which of the following is correct, when considering the phrase “Following the money”? Select all that apply.

  • Requires knowledge of every place the money has been
  • Is often difficult to do given the use of foreign banks for layering
  • Often requires access to foreign bank accounts

Q41. Anomalies are:

  • most often red flags that indicate fraud is present.
  • part of the day-to-day operations for most companies.
  • seldom seen in companies with good internal controls and procedures.

Q42. Data can be altered by:

  • Changing numbers on a check; e.g. making a “3” an “8”
  • Destroying supporting detail
  • Making copies and submitting them as the original
  • All of the other answers are correct

Q43. Common violations pertaining to occupational fraud and abuse include all of the following except:

  • asset misappropriation.
  • corruption.
  • financial reporting fraud.
  • All of these are common violations.

Q44. Conversion can be shown to have occurred by:

  • Tracing the money to the defendant’s care
  • Tracing the money to the defendant’s department
  • Tracing the money to the defendant’s bank account
  • All of the above

Q45. Perpetrators of large frauds are likely to use the money for all of the following EXCEPT:

  • to purchase new homes.
  • to pay for expensive vacations.
  • to support extramarital affairs.
  • to pay taxes.

Q46. Fraud deterrence begins:

  • with the employer’s internal controls.
  • in the employee’s mind.
  • with the fraud examination.
  • with regulatory and legal actions such as PCAOB Auditing Standard No. 5, AICPA Statement on Auditing Standards (SAS) No. 99, and the Sarbanes–Oxley Act.

Q47. The key to successful fraud detection and investigation using digital tools and techniques requires which approach?

  • A systems-type approach.
  • A targeted approach.
  • A results-driven approach.
  • The approach is not relevant if you have access to data warehouses and data mining tools such as Access, ACL, or IDEA

Q48. Upon discovering fraud, internal auditors:

  • must fully investigate it and determine perpetrator(s), value, damage, and recommend possible action.
  • should only continue their investigation if the fraud is in the present or immediately previous period.
  • have an obligation to notify the board of directors when the incidence of significant fraud has been established to a reasonable degree of certainty.
  • must provide the audit committee and the board of directors with a preliminary written statement detailing the known facts and presenting reasonable suspicions as to perpetrators, values, methods, and time periods affected.

Q49. When attempting to capture data that a fraudster has tried to delete from a device, such as a computer hard drive or mobile phone, the forensic expert should: (Mark all that apply)

  • Duplicate the device using forensic hardware/software.
  • Turn off the device using the manufacturer’s on/off switch.
  • Use specialized software/hardware to retrieve the deleted data.

Q1. Which of the following are important to include in your overall fraud policy? (Mark all that apply)

  • Emphasize that the fraud policy will be enforced
  • Provide examples of behaviors that may be red flags for fraud
  • Define fraud in the context of your organization
  • Describe the process for reporting fraud

Q2. Which of the following is an example of financial statement fraud?

  • The sales manager records as a sale in 20X0 shipments of goods that occurred on January 1, 20X1, the day after year-end
  • The financial controller capitalizes a large amount of expenses that should have been included on the income statement
  • The CEO insists that the payment for current year bonuses be deferred to the next fiscal year
  • Two of the other options are correct.

Q3. The main deterrent for fraud in the corporate environment:

  • remains the internal audit team.
  • remains the external audit team.
  • is the threat of getting caught.
  • is the effectiveness of the SEC and FBI investigators.

Q4. Given the acronym M.I.C.E. offered in Chapter 1 / Module 1, which attribute most closely reflects Betty Vinson’s role in the WorldCom fraud.

  • Money
  • Ideology
  • Coercion
  • Ego or entitlement

Q5. Which of the following is NOT an example of financial statement fraud?

  • The sales manager records as a sale in 20X0, finished goods shipped on January 1, 20X1, the day after year-end in order to earn a large bonus
  • The financial controller increases monies in the reserve account in order to meet analysts’ expectations regarding earnings.
  • The CEO insists that the payment for current year accrued bonuses be deferred to the next fiscal year.
  • The treasurer transfer money from one bank account to another in order to mask a shortage.

Q6. Cynthia Cooper provides a good example of the process of what to do when fraud is suspected. Which of the following events occurred first?

1 point

  • The CFO is fired
  • Cooper began informal questioning to confirm that the entries under suspect were erroneous.
  • Cooper met with the Audit Committee chair.
  • The SEC files a civil fraud suit.

Q7. With regard to losses from fraud and attempts to recover stolen money, which of the following is the correct statement?

  • Since the Sarbanes-Oxley law was passed recovery amounts have increased dramatically.
  • Amounts recovered often approach 50%
  • Approximately 50% of the time, the organization recovers nothing.
  • Organizations usually recover 100% of the money lost.

Q8. In the WorldCom fraud, whose personal life most closely resembled Cynthia Coopers?

  • Internal auditor Gene Morse
  • Internal Auditor Glyn Smith
  • Accountant Betty Vinson
  • Scott Sullivan

Q9. Which is the following statements with regard to the WorldCom fraud in NOT correct?

  • Top WorldCom management, trying to show increasing profits, in a competitive and turbulent market, resorted to demanding the manipulation of accounts through a series of adjusting journal entries.
  • WorldCom continues to be known as a classic case of financial statement fraud.
  • The central part of internal auditor Cynthia Cooper’s WorldCom investigation involved “big data” analysis in order to avoid having to manually review documents.
  • There were many warning signs of problems at WorldCom, but ultimately, tips, investigated by internal auditors brought the fraud into the open.

Q10. WorldCom’s CEO (Chief Executive Officer) received a prison sentence of 25 years, while the CFO (Chief Financial Officer) received a sentence of five (5) years. To what was the difference in sentences attributed?

  • The CFO plead innocent, and presented a superior defense.
  • The CFO plead guilty to lesser charges than the CEO.
  • The CEO admitted directing the fraud.
  • The CFO cooperated with prosecutors and investigators.

More About This Course

Everyday across the world, thousands of businesses are victimized by fraud. Who commits these bad acts? Why? And, how? In this course we are going to help you answer the questions: who commits fraud, why and how. We’ll also help you develop skills for catching them.

SKILLS YOU WILL GAIN

  • Fraud Detection
  • Internal Control
  • Fraud Investigation
  • Forensic Accounting

Conclusion

Hopefully, this article will be useful for you to find all the Week, final assessment, and Peer Graded Assessment Answers of the Forensic Accounting and Fraud Examination Quiz of Coursera and grab some premium knowledge with less effort. If this article really helped you in any way then make sure to share it with your friends on social media and let them also know about this excellent training. You can also check out our other course Answers. So, be with us guys we will share a lot more free courses and their exam/quiz solutions also, and follow our Techno-RJ Blog for more updates.

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