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Fraud Basics
Forensic Accounting Basics
Psychology of the Fraudster - Basics
Psychology of the Fraudster - A deeper look
Legal Considerations
100

These are 2 of the main outcomes from the Sarbanes-Oxley Act of 2002.

What are

- assessment of internal controls

- preservation of evidence

- whistleblower protection

- increased penalties for securities fraud

100

A forensic accounting investigation is grounded in this.

What is evidence?

100

These are the three sides of the fraud triangle?

What are...

  • Perceived Pressure
  • Perceived Opportunity
  • Rationalization
100

M.I.C.E. stand for this.

What is...

  • Money
  • Ideology
  • Coercion
  • Ego/Entitlement
100

This is one of the four amendments to the US Constitution associated with due process.

What are:

- The Fourth Amendment (Search & Seizures)

- The Fifth Amendment (Self Incrimination)

- The Sixth Amendment (Right to Attorney)

- The Fourteenth Amendment (Due process and Equal Protection)

200

Extravagant lifestyles, unexplained accounting anomalies, tips or complaints are all examples of these.

What are red flags?

200

Professional skepticism is...

What is an attitude that includes a questioning mind and a critical assessment of the evidence?

200

These 3 compose the triangle of fraudulent act or elements of fraud?

What are...

  • The Act
  • Concealment
  • Conversion
200
A fraudster will look like this.
What is a normal person.

Commonly male, middle aged, 5+ years of service, never charged with a crime, well educated, acting alone.

200
This approach is preferable to investigators wishing to gain access to documentation.

What is a search warrant?

Warrant holder - not recipient (as in a subpoena) determines which documents are relevant.

300

These are the 4 essential elements of fraud.

What are...

- A material false statement

- Knowledge that the statement was false when it was spoken

- Reliance on the false statement by the victim

- Damages resulting from the victim’s reliance on the false statement

300

This is the primary goal of an auditor.

What is to issue an opinion on the financial statements.

300

The fraud diamond adds this element to the fraud triangle.

What is capability?

300

These fraudsters seek to deliberately defraud an organization with little remorse.

What is a predatory fraudster?

300

These are the considerations of documentary evidence.

What are: 

1) Not forged.

2) Original documents are preferable.

3) Not hearsay or objectionable.

4) Authenticated.

5) Reliable.

400

These are classifications of organizational frauds.

From the fraud tree: What are...

- Corruption

- Asset Misappropriation

- Fraudulent Financial Statements

400

These are the primary functions of a forensic accountant.

What are:

  • Litigation advisory services
  • Investigative services
400

The best way to prevent fraud is to improve this side of the fraud triangle.

What is opportunity?

400

Even if an organization has excellent internal controls in place, these 2 actions can result to fraud.

What are collusion and management override?

400

This is the process where each side may explore the merits of the others side's arguments by obtaining documentary and testimonial evidence.

That is discovery?

500

Skimming is an example of this type organizational fraud classification.

What is asset misappropriation.

500

An employee surfing the internet and searching for college friends on the internet is an example of this.

What is abuse?

500

This fraud element differentiates an error from a fraud.

What is Conversion?

A mistake becomes a fraud when the benefits of the error/theft are converted to the perpetrator for personal benefits.

500

The best way to deter employee theft, is to increase this.

What is the perception of detection?

500

Evidence is intended to support this.

What is facts at issue?