unusual patterns always indicate the existence of fraud
False
ODBC is the best approach to import because it achieves a direct, rich connection to the source database
true
data-driven analysis uses the company's database to search for normal relationships between numbers.
False
according to Benford's law, the first digit of natural sets of numbers will begin with a 9 or more often than with an 8
False
when using Benford's law, potential suspects are less likely to know you are trying to detect fraud than if you use more direct detention techniques
True
Understanding the kinds of frauds that can occur is not important when using a data-driven detection method
False
digital analysis using Benford's law can be performed on databases of any size
True
data-driven fraud detection can pay large dividends and is an effective way to reduce teh cost of fraud in any organization
True
unexplained changes are common in financial statements
False
balance sheets must be converted to change statements before they can be used in detecting fraud
true
vertical analysis is a more direct method than horizontal analysis in focusing on changes in financial statements from one period to another
False
vertical analysis is a useful detection technique because percenteages are easily understood
True
the z-score calculation is the best way to stratify data
False
a single symptom (red flag) is almost always enough information to identify the type of fraud scheme occuring
False
When detecting fraud, it is important that fraud investigators:
a. remain objective and neutral
data-driven fraud detection:
c. looks for anomalies in databases
once a buyer starts accepting kickbacks from a supplier:
d. all of the above
teh most obvious disadvantage of teh data driven approach is:
b. high cost
benford's law
b. predicts that the first digit of random number stes will begin with a 1 more often than a 2, and a 2 more often than a 3 and so on
a detection method that focuses on the kinds of frauds that can occur and then uses technology to determine whether those frauds actually exist is called:
c. data-driven fraud detection
when deciding which detection method to use, it is important to:
d. all of the above
fraud is best detected through the financial statements by focusing on:
a. unexplained changes in financial statement balances
teh most effective way to convert balance sheets and income statements from position and period statements to change statements is to:
c. perform horizontal and vertical analyses
profit margin, return on assets, and return on equity are all examples of:
b. key financial statement ratios
when vertical analysis is performed:
c. financial statement balances are converted to percentages
horizontal analysis is different from vertical analysis in that:
b. HA calculates the percentage change in balance sheet and income statement numbers from one period to the next, while vertical analysis converts balances in a single period to percentages
which of the following is an advantage of using data analysis software to detect fraud?
c. data analysis software can analyize entire populations rather than just samples
Benford's law is:
d. an effective way to identify anomalies in data sets
if a search revelsa that an employee and a vendor have the same telephone number, this result may indicated that:
b. employees may be establising dummy vendors
when conducting financial statement analysis, which ratio will be the most useful in determining whether a company has erroneously inflated AR?
c. accounts receivable turnover
when trying to identify outliers, what is one of the best statistical approaches?
d. teh z-score calculation
an advantage of using ODBC to import data into a data warehouse is that:
c. ODBC automatically retrieves column names and types from the database
