FRAUD AND CORRUPTION SCHEMES APRIL 2023 PAST PAPER

MONDAY: 24 April 2023. Afternoon Paper. Time Allowed: 3 hours.

Answer ALL questions by indicating the letter (A, B, C or D) that represents the correct answer. This paper is made up of one hundred (100) Multiple Choice Questions. Each question is allocated one (1) mark.

1. Which of the following statements is NOT accurate in regard to financial statement misrepresentation of both the financial performance and financial position of an organisation?

A. Failure to write off bad debts would inflate both the financial performance and position of an organisation
B. An organisation can misrepresent its financial performance and position through failure to include accrued expenses in the financial statements
C. Failure to write off bad debts can only cause misrepresentation of the financial performance of the
organisation
D. Both A and B above

2. Which of the following is NOT an objective of a risk assessment process related to computers and computer systems?

A. Identifying the risks that make an organisation vulnerable to fraud
B. Quantify the impact if the risk materialised
C. Establish an economic balance between the impact if the risk materialised and the cost of the resources required
D. None of the above

3. Which of the following statement is NOT accurate in regard to fraudulent financial reporting?

A. Failure to write off bad debts would cause an overstatement of receivables
B. Failure to write off bad debts would inflate the current ratio
C. Failure to accrual expenses would understate liabilities
D. Failure to accrual expenses would result to an unfavourable current ratio

4. ABC is a government ministry in your country. The management has put measures in place to prevent bribery and kickbacks. Which of the following type of bribery payment method is used to pay large amounts of bribes and is hard to detect?

A. Entertainment and luxurious holidays
B. Loans guaranteed and paid by contractor or vendor
C. Cash payments
D. All the above

5. Healthcare providers defraud insurance companies and government health programs through intentional charging of one procedure as two separate procedures. Which of the following BEST describes healthcare providers’ fraudulent scheme?

A. Up – coding scheme
B. Fictitious services
C. Capper scheme
D. None of the above

6. There are several financial statement fraud schemes that are perpetrated by management to inflate the organisation’s liquidity ratio. Which of the following BEST describes the fraud scheme?

A. Understatement of current liabilities
B. Understatement of liabilities
C. Understatement of current assets
D. Understatement of non-current assets

7. Which of the following would result in an improper valuation of inventory?

A. Writing off obsolete inventory
B. Recording perpetual inventory balance which is higher than the physical balance
C. Recording physical inventory balance which is lower than the perpetual inventory
D. All the above

8. Which of the following statement is NOT true in regard to steps of risk assessment related to computers and computer systems?

A. Identifying the risks and threats of each asset and calculating the probability of each risk materialising, is the first step of a risk assessment
B. Determining the value of each asset of a risk assessment related to computers and computer systems is the second step
C. Recommending the counter-measures and other remedial activities is the fifth step of a risk assessment related
to computers and computer systems
D. Calculating the loss per risk is the fourth step of the risk assessment related to computers and computer systems

9. Which of the following statement is TRUE in regard to theft of data and intellectual property of organisations?

A. A new employee from a competitor cannot expose the new employer to vicarious liability by using or
disclosing secrets obtained from his previous employer in the course of his employment
B. An organisation can only be vicariously liable for misappropriation of proprietary information of another organisation, only if they were aware of its employee’s misconduct
C. An exiting employee cannot expose their employer to vicarious liability by using or disclosing secrets
obtained from his previous employer in the course of his employment
D. None of the above

10. Which of the following is NOT a red flag of financial statement fraud?

A. Unusual revenue and profits rapid growth
B. Unrealistic targets
C. Negative cash flow balances while reporting profits
D. Expected revenue and profits growth

11. Karen received a message stating that somebody was trying to use her account fraudulently through internet banking.

Which of the following BEST describes this social engineering scheme?
A. Phishing
B. Vishing
C. Smishing
D. None of the above

12. Which of the following BEST describes a social phishing scheme in which an internet user is fooled into entering sensitive data into a malicious website that impersonates a legitimate website?

A. Spear Phishing
B. Rock phishing
C. Phishing
D. None of the above

13. Which of the following identity theft schemes BEST describes stealing of a credit card and using it to make personal payments from a victim’s account?

A. Synthetic identity theft
B. Business identity theft
C. Traditional identity theft
D. None of the above

14. Which of the following is NOT a type of network security defense?

A. Network access controls
B. Firewalls
C. Intrusion prevention system
D. None of the above

15. Separation of duties is fundamental to data security. Which of the following is NOT a recommended practice in relation to the separation of duties?

A. Application system users should only be granted access to those functions and data required for their job duties.
B. Program developers should also be program testers because they understand the system better
C. System users should not have direct access to program source code
D. System users can have direct access to program source code

16. Procurement fraud is perpetrated in the cause of a procurement process. Which of the following is NOT a procurement fraud scheme committed during the submission of bids?

A. Bid rotation
B. Defective pricing
C. Complementary bids
D. None of the above

17. XYZ government agency planned and budgeted for three hundred laptops. The procurement department developed the specifications for the laptops and their accessories, but they were developed as separate specifications and therefore increasing the total cost of the laptops. Which of the following BEST describes this type of procurement fraud scheme?

A. Bid specification scheme
B. Bid manipulation scheme
C. Bid tailoring scheme
D. Bid splitting scheme

18. Betty, an employee of a person-to-person payment company, has been stealing account numbers and passwords of customer accounts with the intent of fraudulently using them to make online payments. Which of the following BEST describes the fraudulent scheme?

A. Internet fraud
B. Credit card fraud
C. Debit card fraud
D. All of the above

19. Which of the following is NOT a safeguard that banks could employ to reduce the risks of unauthorized electronic funds transfers?

A. Ensure that the area or city code in the applicant’s telephone number matches the geographical area for the applicant’s address.
B. Always mail PINs separately from other information, such as usernames, with which they are associated.
C. Apply multifactor authentication to verify transfers via EBPP or P2P systems.
D. None of the above

20. Which of the following statements is NOT a red flag of bid splitting?

A. Similar or identical procurements from the same supplier in amounts just slightly under the competitive bids
B. Bidding limits
C. Consecutive related procurements from the several contractors that are within the competitive-bidding or upper-level review limits
D. Unjustified split purchases that fall under the competitive-bidding or upper-level review limits

21. Which of the following BEST describes a Trojan horse?

A. A type of software that, while not definitely malicious, has a suspicious or potentially unwanted aspect to it.
B. A self-replicating computer program that penetrates operating systems to spread malicious code to other systems
C. A type of program that monitors and logs the keys pressed on a system’s keyboard
D. None of the above statement

22. Which of the following statement is NOT correct in regard to Business email compromise schemes identified by Federal Bureau of Investigations (FBI)?

A. BEC (Business email compromise) is a type of spear phishing
B. BEC (Business email compromise) is a type of electronic social engineering
C. BEC (Business email compromise) is a type of social engineering
D. None of the above

23. Which of the following statement is NOT accurate in regard to red flag of bid tailoring scheme?

A. Unexplained changes in contract specifications from previous proposals or similar items
B. Low number of competitive awards to one supplier
C. Specifications developed by or in consultation with a contractor who is permitted to compete in the
procurement
D. None of the above

24. Which of the following is NOT a red flag of bid rigging by contractors?

A. Contractors share work with losing bidders
B. Vendors submit complementary bids
C. There is an obvious pattern of winning bids
D. None of the above

25. Defective pricing is one of the procurement fraud schemes perpetrated during the solicitation phase of the procurement process. Which of the following is NOT a scheme related to defective pricing?

A. The use of an outdated pricing list
B. Labour mischarges
C. Material mischarges
D. Accounting mischarges

26. Which of the following is NOT a type of administrative security and controls?

A. Security policies and awareness training
B. Incidence response plans
C. Computer security audits and tests
D. Intrusion prevention system controls

27. Which of the following is NOT a type of computer technical control to secure computer systems and communication networks?

A. Logical access controls
B. Network Security
C. Intrusion detection controls
D. Operating Systems Security

28. Which of the following techniques BEST describes an attempt to exploit the system security for purposes of identifying the systems’ vulnerabilities

A. Detection intrusion system
B. Network security system
C. Application Security
D. None of the above

29. Which of the following is NOT a method that could be used to protect personal information from identity theft?

A. Protect computers with strong and regularly updated firewalls and anti-virus software
B. Avoid using public Wi–Fi networks
C. Limit the amount of information shared on social media
D. None of the above

30. Which of the following BEST describes a fraud scheme that involves using an individual’s stolen credit card or credit card number to purchase goods or services?

A. Identity theft Scheme
B. Electronic transfer
C. Credit card fraud
D. None of the above

31. ABC computer company and another four companies agreed to inflate the cost of a bid, by the other four companies submitting bids each time the lowest where ABC supposedly biding the lowest. In comparison with the market price, the cost of the lowest bid was very high. Which of the following BEST describes the type of bid-rigging scheme that ABC Computer company and the other four companies were involved in?

A. Bid market division
B. Token bids scheme
C. Bid market division
D. None of the above

32. Which of the following statement is NOT Accurate in regard to social engineering?

A. Phishing is a type of social engineering scheme that involves impersonating a trusted individual or entity and manipulating victims into providing sensitive
B. A vishing scheme is generally transmitted as an incoming recorded telephone message that uses a spoofed caller ID matching the identity of a misrepresented organisation.
C. SMiShing is a hybrid of phishing using voice for social engineering to and steal individual’s personal
information
D. None of the above

33. Which of the following is NOT an authenticating process for users in information systems?

A. Authentication process involves – Something the user knows
B. Authentication process involves – Something the user has
C. Authentication process involves – Something the user is
D. None of the above

34. Which of the following is a type of network security systems that are designed to supplement firewalls and other forms of network security to detecting malicious activity coming across the network?

A. Network access controls systems
B. Logical access controls systems
C. Administrative controls systems
D. None of the above

35. Which of the following is NOT a red flag of a bid specification scheme?

A. Bid manipulation
B. Narrow specifications for the type of goods or services being procured
C. Splitting of bids
D. Broad specifications for the type of goods or services being procured

36. Credit card fraud is rampant in the banking industry. Which of the following presents the greatest risk of card fraud?

A. Card at point of sale
B. Card counterfeiting
C. Accounts takeover
D. All the above

37. Which of the following is NOT a red flags of malware infection?

A. The system suddenly, and for no apparent reason, slows down its response time to commands.
B. The computer stops responding or locks up frequently.
C. The operating system or other programs and applications behave in a predictable manner.
D. None of the above

38. Which of the following is NOT a prevention measure against infection from a malicious program?

A. Use anti-malware software to scan all incoming email messages and files
B. Regularly update the computer with the latest security patches available for the operating system
C. Organisations should develop corporate prevention policies and an employee education program to inform employees of how malware is introduced and what to do when there is suspicion of malware
D. None of the above

39. ABC Company receives an anonymous tip informing them that their procurement and stores personnel in collusion with the suppliers have agreed that the supplier delivers merchandise to the procuring entity employees’ warehouse and then invoices the procuring entity. Which of the following BEST describes the fraudulent offense perpetrated by the supplier?

A. Asset misappropriation scheme
B. Corruption
C. Forgery
D. Conflict of interest

40. Under the International Financial Reporting Standards (IFRS), recognising a long-term project revenue that has not been earned, can best be described as which of the following schemes?

A. Understated revenue scheme
B. Overstated revenue scheme
C. Understated receivables scheme
D. None of the above

41. Which of the following is a legal method of gathering information from competitors?

A. Placing a spy in a company
B. Espionage
C. Competitive intelligence
D. Human intelligence

42. Which of the following is NOT a favorite target of intelligence gatherers?

A. Company’s newsletters
B. Conferences
C. Marketing and sales information
D. None of the above

43. Which of the following BEST describes the method of spying on another company’s activities by placing a person in that entity to gather information to pass to the party that has retained him

A. Competitive intelligence
B. Espionage
C. Covert operations
D. Surveillance

44. Which of the following is NOT a best practice for non-disclosure and non-competition agreement?

A. Employees should sign the non-disclosure and a non-competition agreement only at the beginning of an employment contract
B. The organisation should clearly communicate to employees what is considered confidential information upon hiring and on regular basis
C. At the exit interview an employee should not be made to sign a statement acknowledging that he is aware of the terms and conditions of the non-competition and non-disclosure agreements
D. None of the above

45. Which of the following statement is NOT correct in regard to contract performance mischarges?

A. Material mischarges are more susceptible than labor mischarges
B. Accounting mischarges are more susceptible than labor mischarges
C. Labor and material mischarges are equally susceptible to mischarges
D. None of the above

46. Which of the following statement is NOT correct in relation to bank reconciliations statement?

A. Bank reconciliation statement can help to detect cash misappropriation
B. Bank reconciliation statement can help to detect fraudulent disbursement
C. A manipulated bank reconciliation is both a red flag and a risk of asset misappropriation
D. None of the above?

47. Which of the following statement is NOT accurate in regard to the effects on financial statements attributed to capitalisation of expenses?

A. Capitalising expenses will misrepresent expenses because expenses will be understated and therefore inflate the profits
B. Capitalising expenses will misrepresent assets because the assets will be overstated
C. Capitalising expenses will misrepresent the expenses because, the expenses will be overstated and therefore understate profits
D. None of the above

48. Which of the following procurement fraud schemes involve a procurement employee engaging in the early opening of bids and unjustifiable delay of opening the bids?

A. Bid rigging
B. Bid manipulation schemes
C. Bid suppression
D. None of the above

49. The analysis of a company’s revenue and cost of revenue revealed that the cost of revenue had increased by 80% the previous year. Revenue only increased by 30 %. This scenario is a red flag of which of the following?

A. The number of purchases was lower than the previous year.
B. Sales were low in the current year compared to the previous year
C. Bad sales and marketing strategy
D. None of the above

50. Which of the following is NOT a method that a fraudster might use to conceal inventory shrinkage?

A. Writing off stolen inventory as scrap
B. Falsely reducing the perpetual inventory balance
C. Physical padding of inventory
D. Altering the perpetual inventory records to increase the balances

51. Green, a waiter at a big petrol station, takes a customer’s credit card to process a payment. Green swipes the card through a small device that he regularly uses to steal his customers’ credit card information. Which of the following BEST describe Green’s ‘scheme?

A. Probing
B. Phishing
C. Credit card fraud
D. None of the above

52. Which of the following BEST describe a malicious software used to simplify or automate online criminal activities?

A. Ransomware
B. Spyware
C. Adware
D. None of the above

53. Which of the following are red flags of insider computer fraud?

I. Access privileges are limited to those required to perform assigned tasks.
II. Access logs are not reviewed regularly
III. Production programs are run during unusual business hours.
IV. Exception reports are not reviewed and resolved
A. I only
B. I and II only
C. II and III only
D. II, III and IV

54. The type of fraud that targets groups of people who have some social connection, such as neighbourhood, professional association of racial minorities or immigrant groups, is referred to as:

A. Consumer fraud
B. Ponzi scheme
C. Charity schemes
D. None of the above

55. Which of the following statement is ACCURATE in regard to business email compromise?

A. Attackers target payable accountants in the organisation who are responsible of making large amounts of payments
B. Attackers target any individuals in the organisation
C. Business compromise is a type of technical surveillance attack
D. None of the above

56. A non- performing bank loan is a red flag of fraud. Which of the following BEST describe the fraud scheme that is often associated with a nonperforming loan?

A. Draw request
B. Construction overheads
C. Hold backs
D. None of the above

57. Which of the following methods might be used to conceal a sham loan in which the loan officer receives part of the loan proceeds

A. Letting the loan go into arrears
B. Leaving the bad loan in the books
C. Forwarding the loan over to a collections agency
D. None of the above

58. What is the primary difference between a Ponzi scheme and a pyramid scheme?

A. A pyramid scheme promotes itself as a pyramid, whereas a Ponzi scheme promotes itself as an investment opportunity
B. A Ponzi scheme is promoted by encouraging victim members to recruit new members
C. All pyramid schemes are legal, whereas all Ponzi schemes are illegal
D. In a pyramid scheme, old investors are paid with money from new investor

59. Which of the following is NOT a common scheme perpetrated by suppliers of reusable medical equipment?

A. Providing substandard equipment and charging for quality equipment
B. Falsifying prescription for medical equipment
C. Billing after the equipment is returned
D. None of the above

60. Which of the following is NOT considered to be a red flag of a Ponzi scheme?

A. An investment with returns responding to financial markets
B. A financial manager who manages, administers and retains custody of the investment funds
C. A financial manager who puts an unusual amount of pressure on investors to act immediately
D. An investment that promises extremely high or short-term returns with very low risk

61. Which of the following scheme BEST describe a scheme, where a fraudster s, contacts a victim of consumer fraud, promising to assist in retrieving the lost money. However, the investigation requires an upfront fee and the consumer is swindled again.

A. Debt consolidation
B. Advance-fee swindle
C. Factoring scheme
D. None of the above

62. Which of the following BEST describe the worst real estate loan fraud scheme?

A. Fraudulent draw requests
B. Fraudulent disbursements
C. Fraudulent appraisals
D. None of the above

63. Pauline obtained a loan from Upperhill Commercial Bank. Pauline gave the bank a security interest in her commercial property. Before lien was filed, Pauline managed to get another loan from another bank using the same commercial property as security for the loan. Which of the following BEST describes Pauline’s scheme?

A. Security skimming
B. Double collateral
C. Theft of security
D. All the above

64. High percentages of returns, missing compliance certificates, and evidence of falsified inspection test results, are red flags of which stage of the procurement fraud process?

A. Solicitation phase
B. Pre-solicitation phase
C. Administration and performance phase
D. Award and evaluation phase

65. Which of the following can BEST describe a fraud perpetrated by medical providers, medical suppliers, or medical facilities on patients or health care programs to increase their own income through fraudulent schemes

A. Fictitious services fraud
B. Insurer fraud
C. Insured fraud
D. None of the above

66. Which of the following statement in regard to financial statement fraud is ACCURATE?

A. Fictitious revenue scheme would lead to understated receivable
B. Concealed expenses scheme would lead to understated profits
C. Capitalisation of expenditure would lead to understated profits
D. None of the above

67. Which of the following statement in regard to the effect of fraudulent transactions on the current ratio is NOT accurate?

A. Overstated receivables will result to an inflated current ratio
B. Understated current liabilities will result to an inflated current ratio
C. Overvaluation of inventory will result to an inflated current ratio
D. None of the above

68. Sue works for Riverside commercial bank at the back office. Sue has been monitoring an elderly woman’s account for some time and noted that the account has been dormant for about seven years. She then debits the woman’s account and credit an account controlled by herself. Which of the following BEST describes the bank employee’s scheme?

A. False accounting
B. Unauthorised withdrawal
C. Embezzlement of customers’ funds
D. None of the above

69. George is an accountant of XYZ state corporation. George is in charge of receivables accounts. George conspired with a customer to write off the customer’s debt in the books. The customer gave George some cash as a reward for wiring off his big debt. Which of the following BEST describe George’s fraudulent scheme?

A. Bribery, misappropriation and computer fraud
B. False accounting, Bribery and computer forgery
C. Bribery, misappropriation and computer forgery
D. None of the above

70. Which of the following is NOT a best practice of safeguarding proprietary information?

A. Developing and implementing a risk-based information security
B. Implementation of data minimisation
C. Implementation of data classification
D. None of the above

71. Which one of the following statements is NOT accurate in regard to the methods used to make corrupt payments?

A. Bribe payers often make corrupt payment by giving an interest in the enterprise
B. Payers often make corrupt payment by taking a credit card on behalf of the recipient and make monthly payments for amount spent
C. Bribe payments can be made in form of a property sold to the recipient below the market value
D. None of the above

72. Which of the following is a type of a skimming scheme?

A. Fictitious revenue
B. Overstated revenue
C. Concealed expenses
D. None of the above

73. Which of the following detection methods can help to detect the skimming scheme?

A. Analysing receipts
B. Preparing a bank reconciliation statement
C. Comparing the receipts with the bank deposits
D. None of the above

74. Rogers is an accountant at Blue Company Ltd. Rodgers noticed that the repairs and maintenance account was more than the budgeted amount. Rogers wants to conceal the misappropriation. Which of the following transaction can help to conceal the misappropriation?

A. Credit repairs and maintenance account and credit another expense account
B. Credit repairs and maintenance account and credit an asset account
C. Debit repairs and maintenance account and credit furniture and payables
D. None of the above

75. Which one of the following statements is TRUE in regard to the types of workers’ compensation fraud schemes?

A. The agents collect premium and submit all the premiums to the insurance company

B. A lawyer, doctor and a claimant cannot collude to defraud an insurance company

C. In premium fraud, an employer overstates the amount of payroll under high risk classifications to get a lower- cost premium

D. None of the above

76. Which one of the following is NOT a solicitation phase, procurement fraud schemes involved in competitive bidding process?

A. Bid rigging
B. Defective pricing
C. Bid manipulation
D. None of the above

77. Which of the following is NOT a method that is used to manipulate and destroy data?

A. Phishing
B. Overflow exploits
C. Privilege escalation
D. Back door

78. Which of the following is TRUE in regard to cybercrime?

A. Entering an altered or falsified data in the computer by an authorised employee, is a type of cybercrime
B. Modification of data by an authorised employee is a type of cybercrime
C. Modification of data through wiretapping is a type of cybercrime
D. All the above

79. Which of the following is NOT a method used to destroy and manipulate data?

A. Phishing
B. Launching a buffer overflow exploits
C. Entering false information into a computer system
D. Transmitting data to unauthorised destination

80. Which of the following is NOT true in regard to internet of things technology?

A. IOT technology tends to focus on innovation design rather than privacy or security
B. IOT technology tends to focus on privacy or security rather than innovative design
C. IOT devices commonly connect to networks using inadequate security
D. All the above

81. Which of the following describes the method used to gain unauthorised access through the use of a secret point into the program

A. Trojan horse code
B. Back door
C. Salami techniques
D. None of the above

82. Which of the following statement is TRUE in regard to physical access control?

A. The primary purpose of physical access controls is to prevent unauthorised access to computer and computer systems
B. The primary purpose of physical access controls is to prevent unauthorised access to the computer room or station
C. Card system is a type of a physical control
D. Use of password is a type of physical control

83. Which of the following is NOT a type of administrative security controls?

A. Security policies and procedures
B. Security awareness and education
C. Security reviews and audit
D. Logical access controls

84. Both ABC and XYZ companies are major players in the construction industry. ABC company paid XYZ company an inducement to refrain from bidding for a contract tender issued by a government entity. Which of the following BEST describes the procurement scheme perpetrated by ABC and XYZ companies?

A. Both ABC and XYZ engaged in bid rotation
B. XYZ engaged in bid rigging
C. Both ABC and XYZ engaged in bid suppression
D. XYZ engaged in bid suppression

85. Which of the following financial statement fraud scheme is NOT associated with financial performance fraudulent reporting of an organisation

A. Overstatement of revenues
B. Understatement of expenditure
C. Improper valuation of non-current assets
D. Capitalisation of expenses

86. Which of the following is a financial statement fraud scheme that is NOT associated to fraudulent reporting of the financial position of the organisation

A. Improper disclosures
B. Improper non -assets valuation
C. Improper current assets valuation
D. Concealed liabilities

87. Which of the following BEST describes the form of corruption where a public official receives money and use his position to influence a decision or an act?

A. Bribery
B. Commercial Bribery
C. Official Bribery
D. Kickbacks

88. Which of the following BEST describes a healthcare fraud scheme in which a provider bills for a higher level of service than they actually provided

A. Unbundling
B. Overutilisation
C. Upcoding
D. Double billing

89. Which of the following statement BEST describes a bid rotation procurement scheme?

A. There is a pattern of winning bids
B. Competitive bidders refrain from bidding
C. Bidders issue complementary bids
D. Bidders collude with employees of the procuring entity to rig the bids

90. Anna is an employee in the procurement department of company XYZ. Anna creates a shell company by the name of Compt Ltd. She purchases goods and then sells them to her employer through the shell company at an exorbitant price.

This type of fraudulent scheme perpetrated by Anna can BEST be described as which of the following scheme?

A. Pay and return scheme
B. Personal purchases through false invoicing
C. Pass through scheme
D. False purchase requisition scheme

91. Which of the following is NOT a red flag of bid rotation scheme?

A. Losing bidders are subcontracted by the winning bidder
B. A pattern of winning bids
C. Extremely high prices of bids even for the lowest bid
D. All the above

92. Which of the following is NOT a method that can be used to prevent a computer from being infected by malware softwares?

A. Update the latest security patches
B. Use anti-malware software
C. Update the operating system regularly
D. None of the above

93. Which of the following is NOT a technical security control for securing computer systems and communication networks?

A. To install operating system security
B. To install network security defenses
C. To encrypt sensitive data files
D. Logical access control

94. Which of the following statements is NOT accurate in regard to cybersecurity?

A. Cybersecurity is the protection of computer systems and networks against unauthorized, use, disclosure modification or disclosure
B. Security controls slow down production, therefore securities officers, users, system operation and
administrators should work together to draw a balance between security and production
C. The purpose of security controls is to enhance production
D. None of the above

95. Which of the following is NOT accurate in regard to computer technical security?

A. Technical security can also be referred to as logical control
B. Technical security involves use of safeguards incorporated into computer hardware and software
C. Encryption and anti -virus software are examples of technical security
D. Security policies and procedures are types of technical security

96. There are several financial statement fraud schemes that are perpetrated by management and directors to misrepresent the financial performance and position of the organisation. Which of the following is NOT one of those schemes?

A. Omission of liabilities
B. Capitalising expenses
C. Improper recognition of revenue
D. None of the above

97. Which of the following is NOT a common reason why management engage in fraudulent financial reporting?

A. To meet compliance requirements
B. Pressure for performance bonuses
C. To avoid negative publicity
D. Immediate financial gain

98. Which of the following statement is NOT true in regard to methods used by identity thieves to steal personal and business information?

A. Identity thieves use ransomware, to collect the victim’s personal information
B. Identity thieves often engage in impersonating the victim
C. Identity thieves can use company employees to provide them with customer’s information
D. None of the above

99. Which of the following statement is NOT Accurate in regard to related party- transactions?

A. Related party-transactions must be disclosed in the financial statements
B. Undisclosed related party-transactions is a type of financial statement fraud related to inadequate disclosure
C. Related party transactions not allowed because they are fraudulent
D. All the above

100. Which of the following is NOT a method in which fraud can be perpetrated through the electronic transfer?

A. A biller might send a bill for services not rendered or for goods not delivered
B. A person who has stolen information of another person’s bank account might instruct a biller to obtain payment from the other person’s account
C. A bank employee might use customer information to direct transfers from a customer’s account
D. None of the above

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