Question 1

Benford's law can help detect fraud by:

Accepted Answer

A)  establishing weaknesses in the accounting control system.
B)  identifying accounting anomalies.
C)  focusing on unexplained changes.
D)  identifying possible attempts by fraudsters to make stolen amounts look random.E) All of the above
F) B) and D)

Question 2

Which of the following in the most complete definition of a Matosas Matrix?​

Accepted Answer

A)  ​The Matosas Matrix is a table of data useful during audits.
B)  ​The Matosas Matrix is a compromise between prior and real-time data.
C)  ​The Matosas Matrix is a high-level chart that lists a specific group of items (i.e., contracts)  with their demographics over a specific period of time..
D)  ​The Matosas Matrix is a high-level chart listing possible fraud indicators related to a group of items (i.e., contracts)  for a specific period of time.E) B) and C)
F) A) and D)

Question 3

According to Benford's law,the first digit of random data sets will most often begin with which number?

Accepted Answer

A)  7
B)  1
C)  3
D)  4E) B) and C)
F) All of the above B

Question 4

The proactive method of fraud detection is a six-step process.Which of the following is the correct process sequence?

Accepted Answer

A)  Identify possible frauds that could exist; catalog possible fraud symptoms; understand the business; use technology to gather data about symptoms; automotive detection procedures; analyze results; and investigate symptoms
B)  Catalog possible fraud symptoms; understand the business; identify possible frauds that could exist; analyze results; use technology to gather data about symptoms; and investigate symptoms
C)  Understand the business; identify possible frauds that could exist; catalog possible fraud symptoms; investigate symptoms; use technology to gather data about symptoms; and analyze results
D)  Understand the business; identify possible frauds that could exist; catalog possible fraud symptoms; use technology to gather data about symptoms; analyze results; and investigate symptomsE) A) and B)
F) A) and C)

Question 5

The red-flag that is generally identified when vendors with invoices for the same amount on the same day are found is:

Accepted Answer

A)  dummy vendors.
B)  employees purchasing goods for personal use.
C)  billing more than once for the same purchase.
D)  providing poor-quality goods.E) B) and C)
F) All of the above

Question 6

ACL stands for:

Accepted Answer

A)  Account Coverage Level.
B)  Audit Command Language.
C)  Actuarial Confidence Level.
D)  Auditors' Common Language.E) A) and D)
F) A) and C)

Question 7

One of the most common errors investigators make when analyzing time trends is:

Accepted Answer

A)  incorrect data preparation.
B)  focusing only on one variable, time (the x-axis if graphed) .
C)  not monitoring the time taken.
D)  not standardizing for time.E) C) and D)
F) All of the above

Question 8

​What is a unique feature of Picalo,the data analysis toolkit that differentiates it from other packages?

Accepted Answer

A)  ​Picalo includes sampling techniques.
B)  ​The primary focus of Picalo is auditing.
C)  ​The Picalo program mames automation of procedures possible.
D)  ​The Picalo program is free.E) C) and D)
F) B) and D)

Question 9

Which of the following proactive fraud detection methods use Benford's Law to detect fraud?

Accepted Answer

A)  Vertical analysis
B)  Digital analysis
C)  Real-time analysis
D)  Time trend analysis.E) All of the above
F) A) and B)

Question 10

A mathematical algorithm that predicts the percentage of the time each digit will appear in a sequence of numbers is:

Accepted Answer

A)  inductive fraud detection.
B)  deductive fraud detection.
C)  Benford's law.
D)  horizontal analysis.E) A) and B)
F) All of the above

Question 11

Which of the following is true for accounting anomalies?

Accepted Answer

A)  They are primarily caused by lack of training.
B)  They represent intentional sabotage of controls.
C)  They are problems caused by failures in systems, procedures, and policies.
D)  They represent fraud.E) A) and B)
F) All of the above

Question 12

Horizontal analysis is performed when:

Accepted Answer

A)  total assets are set at 100% and all other balances are a percentage of total assets.
B)  the percentage change in the balance sheet and income statement numbers is computed for one period to the next.
C)  there is a need to calculate and compare key ratios from period to period.
D)  income statement amounts are shown as a percentage of total sales.E) None of the above
F) C) and D)

Question 13

____ include statistical summaries of each column that include control totals,mean,maximum,minimum,standard deviation,number of zero values,number of empty records,etc

Accepted Answer

A)  Captions
B)  Histograms
C)  Headings
D)  DescriptivesE) B) and D)
F) None of the above

Question 14

What is the primary drawback of the data-driven approach?

Accepted Answer

A)  More expensive and time intensive than the traditional approach.
B)  The time necessary to verify the large number of indicators identified.
C)  Cannot highlight frauds while they are still small.
D)  The investigator loses control of the fraud investigation process.E) B) and C)
F) A) and B)

Question 15

Which of the following statements is NOT true?

Accepted Answer

A)  In recent years there have been many cases of financial statement fraud.
B)  Proactive fraud detection methods are in their infancy.
C)  Accounting anomalies indicate fraud has or is occurring.
D)  Fraud investigation involves determining who committed the fraud, the schemes used and how much money or assets were taken.E) A) and B)
F) A) and C)

Question 16

An appropriate red flag search to detect kickbacks or other fraud being committed by vendors would include:

Accepted Answer

A)  invoices without valid purchase order.
B)  employee and vendor telephone numbers are the same.
C)  purchase orders with zero dollar amounts by buyer.
D)  price increases greater than 20% for several consecutive years.E) B) and D)
F) B) and C)

Question 17

Which of the following is least effective while searching for anomalies?

Accepted Answer

A)  Comparing account balances in the statements from one period to the next.
B)  Calculating key ratios and comparing them from one period to the next.
C)  Performing horizontal analysis.
D)  Performing vertical analysis.E) A) and D)
F) A) and B) A

Question 18

While using n-grams,a match percentage of ________ or ________ generally indicates very similar values.

Accepted Answer

A)  10 percent, smaller
B)  20 percent, greater
C)  5 percent, smaller
D)  40 percent, greaterE) B) and C)
F) C) and D)

Question 19

Which statistical approach is one of the most powerful and yet simple methods for identifying outliers?

Accepted Answer

A)  N-grams
B)  Z-score
C)  Time-trend analysis
D)  Soundex algorithmE) C) and D)
F) B) and D)

Question 20

​What are detectlets?

Accepted Answer

A)  ​Detectlets are small program plug-ins that discover specific indicators.
B)  ​Detectlets are infrequent accounting anomalies discovered during an audit.
C)  ​Detectlets are fraud indicators highlighted by the data process program during an audit.
D)  ​Detectlets are items discovered by the program that indicate the percentage possibility that fraud is present.E) B) and C)
F) A) and D) A

Exam 6: Data-Driven Fraud Detection

Benford's law can help detect fraud by:

Correct AnswerverifiedShow Answer

Which of the following in the most complete definition of a Matosas Matrix?​

Correct AnswerverifiedShow Answer

According to Benford's law,the first digit of random data sets will most often begin with which number?

Correct AnswerverifiedB

The proactive method of fraud detection is a six-step process.Which of the following is the correct process sequence?

Correct AnswerverifiedShow Answer

The red-flag that is generally identified when vendors with invoices for the same amount on the same day are found is:

Correct AnswerverifiedShow Answer

ACL stands for:

Correct AnswerverifiedShow Answer

One of the most common errors investigators make when analyzing time trends is:

Correct AnswerverifiedShow Answer

​What is a unique feature of Picalo,the data analysis toolkit that differentiates it from other packages?

Correct AnswerverifiedShow Answer

Which of the following proactive fraud detection methods use Benford's Law to detect fraud?

Correct AnswerverifiedShow Answer

A mathematical algorithm that predicts the percentage of the time each digit will appear in a sequence of numbers is:

Correct AnswerverifiedShow Answer

Which of the following is true for accounting anomalies?

Correct AnswerverifiedShow Answer

Horizontal analysis is performed when:

Correct AnswerverifiedShow Answer

____ include statistical summaries of each column that include control totals,mean,maximum,minimum,standard deviation,number of zero values,number of empty records,etc

Correct AnswerverifiedShow Answer

What is the primary drawback of the data-driven approach?

Correct AnswerverifiedShow Answer

Which of the following statements is NOT true?

Correct AnswerverifiedShow Answer

An appropriate red flag search to detect kickbacks or other fraud being committed by vendors would include:

Correct AnswerverifiedShow Answer

Which of the following is least effective while searching for anomalies?

Correct AnswerverifiedA

While using n-grams,a match percentage of ________ or ________ generally indicates very similar values.

Correct AnswerverifiedShow Answer

Which statistical approach is one of the most powerful and yet simple methods for identifying outliers?

Correct AnswerverifiedShow Answer

​What are detectlets?

Correct AnswerverifiedA

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Which of the following in the most complete definition of a Matosas Matrix?

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B

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What is a unique feature of Picalo,the data analysis toolkit that differentiates it from other packages?

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A

While using n-grams,a match percentage of or generally indicates very similar values.

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What are detectlets?

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A