CFE - Financial Transactions and Fraud Schemes

CFE - Financial Transactions and Fraud Schemes practice questions, page 9 of 10, with answer review and explanations.

Question 41

What type of fraud scheme would an analysis of payroll withholdings be MOST LIKELY to reveal?

  1. A falsified hours and salary scheme
  2. A ghost employee scheme
  3. A fraudulent commissions scheme
  4. An expense reimbursement scheme

Question 42

All of the following methods would be helpful in detecting a skimming scheme EXCEPT:

  1. Comparing register totals to the cash count
  2. Confirming customers’ outstanding account balances
  3. Counting the physical inventory
  4. Examining journal entries for accounts receivable write-offs

Question 43

All of the following measures would help prevent the theft of company inventory EXCEPT:

  1. Having the purchasing supervisor perform the physical inventory count
  2. Restricting inventory access to authorized personnel only
  3. Having different people responsible for receiving inventory and shipping it
  4. Using prenumbered inventory receiving reports

Question 44

Which of the following statements regarding financial statement disclosures is FALSE?

  1. There is nothing inherently wrong with related-party transactions, as long as they are fully disclosed.
  2. Management must disclose potential losses from ongoing litigation if the related liability is highly likely.
  3. All information relating to the company must be disclosed in the financial statements, regardless of materiality.
  4. Events occurring after the close of the reporting period that could have a significant effect on the company’s financial position must be disclosed.

Question 45

June, a 76-year-old woman, receives a phone call from a man impersonating one of her relatives. He claims to have a lot of debt and asks her to secretly send him money so that the rest of the family will not find out. June has MOST LIKELY been victimized by which of the following schemes?

  1. Pretexting fraud
  2. Grandparent scheme
  3. Missing-heir scheme
  4. Affinity fraud