Fraud Ch 13

  1. Which of the following is Not a fraud scheme involving inventory purchases?
    Not recording purchases
    Overstating purchase returns and purchase discounts
    Recording unearned revenues as earned
    Recording payables in subsequent period
    recording unearned revenues as earned
  2. A contingent liability should be disclosed, but not recorded on the books if the likelihood of loss is
    reasonably possible
  3. Which of the following is an analytical symptom of liability fraud
    income that appears to be too smooth
  4. Which of the following is not a ratio examined to determine the underreording of notes, mortgages, leases, and pensions
    current ratio
  5. Which categories of costs can be inappropriately capitalized as intangible assets
    marketing costs
    startup costs
    advertising costs
    all of the above
  6. Which of the following does not relate to overstatement of assets in mergers and acquistions?
    Underreporting depreciation expense
  7. Which of these asset frauds can be difficult to detect by analytical symptoms
    overstatement of assets in a merger or acquisition
  8. Which of the following methods would be best to detect cash fraud
    request bank confirmations
  9. Which misrepresentation or omission in the footnotes occurs most frequently
    not disclosing transactions with related parties
  10. Which of the following questions are useful in determining the legitimacy of a company's products
    does the company's performance make sense when compared with the performance of similar companies
    is the company cash poor and desperate for immediate investors
    is there anything that cannot be disclosed because it is purported to be the company's unique success factor
    all of the above
  11. Which of the following is a primary type of transaction that can create liabilities for a company
    purchasing inventory
    borrowing money
    selling purchased goods
    leasing assets
    all of the above
  12. When accounts payable related liabilities are understated, purchases and invetory are often, or the financial statements don't balance
    it is impossible to tell
  13. Recognizing something as revenue instead of as a liability has a positive effect on the reported financial statements because
    it understates liabilities
    it overstates revenues
    it overstates net income
    a b and c are correct
  14. The most common fraud involving car companies and the warranties they offer would most likely be
    not recording or underrecording future obligations
  15. FAS 5 requires contingent liabilities to be recorded as liabilities on the balance sheet if the likelihood of loss or payment is
  16. Analytical sypmtoms of accounts payble fraud most often relate to reported ap balanes that appear
    too low
  17. proactively searching for analytical symptoms related to financial statment fraud means that we are looking for accounts that appear too low, high or unusual?
    all of the above
  18. When focusing on changes you hsould consider changes from period to period in recorded balance, relationships between balances, balances of other nonsimilar companies
    the first 2
  19. Overstating cash is usualy difficult because
    cash balances can be easily confirmed with bankes and other financial institutions
  20. Inadequate disclosure fraud usually involves
    statements in the footnotes that are wrong but do not impact the financial statement
    disclosures that should have been made in the footnotes but were not
    both a and b
  21. when examining whether a company has underrecorded accounts payable, each of the following ratios is helpful exept
    unearned revenue/accounts payable
  22. each of the followign is a symptom relating to understatement of liability fraud excetp
    original purchase related records where copies could exist
  23. Each of the following assets is correctly linked with how it can be overstated execpt
    inventory can be overstated by improperly capitialzing these assets
  24. Which of the following factors does not make fraud more difficult to detect
    all of the above make fraud mroe difficult to detect
  25. A form 1099 with missing witholdings may be a fraud symptom for which liability account
    accrued liabilities
  26. In liability fraud, liabilities are most often
  27. Which of the following is usually the hardest fraud to detect
    disclosures fraud
  28. Of the following, the most difficult account for managemtn to intentinonallu misstate is
  29. Which of the following is not a way to underrecord liabilities
    all are ways
  30. when looking for accounting or documentary symptoms of fraud when a merger occurs on of the first steps should be to
    make sure that the accounting methods used were appropriate and consistent with accounting standards
  31. Which of the following is a good place to look for inadequate disclosures
    BOD minutes
    correspondence and invoices from attorneys
    confirmations with banks and other
    loan agreements
    all of the above
Card Set
Fraud Ch 13
Fraud Ch 13