MASTERINGINTERNALCONTROLSANDFRAUDPROTECTION

TESTBANK

Section1HOWDISHONESTEMPLOYEESSTEALINVENTORY

1. Unconcealedlarcenyincludes:
a. stealingwithnoattempttocoverupthetheft
b. falsifiedreceivingreportsthatcoverupatheftbyrecordinga
shortageordefectivegoods
c. alteringinventoryrecordstomatchthebalanceintheinventoryaccount
d. alloftheabove

2. Thegreatestdangeracompanyfacesinthetheftofinventoryis:
a. lackofwrittenproceduresonexactlyhowinventoryistoberecorded
b. havingnocentralizeddepartmentforreceivingandstoring
merchandise
c. bothaandb
d. neitheranorb

3. Analyticalreviewsusedtodetectinventorytheftmightincludeaperiod
toperiodcomparisonof:
a. apercentageincreaseinsalesthatdoesnotmatchtheexactsame
percentageincreaseinofcostofgoodssold
b. grossprofit(netsalesofgoodssold)netsales
c. averageinventorycostofgoodssold
d. alloftheabove

4. Themostcommontypeofnoncashtheftis:
a. Unconcealedlarceny
b. Falsifiedreceivingandshippingreports
c. Fraudulentshipments
d. Fraudulentwriteoffs

5. Salesordersarewrittenbysalespeoplewhohavenoaccesstothegoods,
whicharereleasedbywarehousepersonnel.Thisisexampleof:
a. ananalyticalreview
b. establishingasystemforstoringandcountinginventory
c. properdocumentationthatismonitoredproperly
d. segregationofduties

6. Whichofthefollowingmayinvolvealteringphysicalinventorycountsto
coveratheft?
a. afraudulentwriteoff
b. afraudulentshipments
c. afalsifiedshipping/receivingreport
d. unconcealedlarceny

Testbank 1
MasteringInternalControlsandFraudProtection

AmericanInstituteofProfessionalBookkeepers,2010

Testbank 2
MasteringInternalControlsandFraudProtection

Section2HOWTOPREVENTORSPOTEMPLOYEETHEFT

1. Beforehiringsomeoneforapositioninvolvingaccesstocash,checksor
inventory,acompanyshouldchecktheapplicants:
a. pastemployment
b. references
c. criminalconvictions
d. alloftheabove

2. Beforeseekinginformationaboutajobcandidate,acompanyshould
consultalaborlawyerabout:
a. obtainingtheapplicantsauthorizationtoseekbackground
information
b. thewordingofthepermissiontoseekbackgroundinformation
c. proceduresfordealingwithrejectedcandidatesifbackground
informationwasusedinthehiringdecision
d. alloftheabove

3. Whichofthefollowingmaybeanindicationofinventorytheft?
a. COGSissignificantlydifferentfromtheforecastamount
b. aphysicalcountofinventoryrevealsmissingitems
c. inventoryturnovershowsanabnormalincrease
d. grossprofitfallssignificantly
e. alloftheabove

4. Tofindoutifanapplicanthascriminalconvictions,youmightgotothe:
a. districtattorney'soffice
b. countybureauofcriminalrecords
c. countycourthousecriminalrecordsdivision
d. countybureauofcriminalrecords,recordsresearchdivision

5. Afidelitybond:
a. allowsyourcompanytorecovermorethanthepolicyamount
b. coversunexplainedinventorytheft
c. bothoftheabove
d. neitheroftheabove

Testbank 3
MasteringInternalControlsandFraudProtection

Section3CHECKFRAUD

1. Themostcommontypesofcheckfraudinclude:
a. forgeryofyourcompany'schecks
b. checkswrittenoninsufficientfunds
c. checkswrittenonaclosedaccount
d. bandc

2. Inadditiontofanningchecksforsubtlecolorchanges,acompanyshould
investigate:
a. checksoutstandingfortoolong
b. toomanycheckswithsecondendorsements
c. achecklackingthebanksaddress
d. alloftheabove

3. Whichofthefollowingshouldemployeesbetrainedtolookforonacheck?
a. morethanoneperforatededge
b. aroughtexturetoseeifpaperisofbankcheckquality
c. fadedcolors
d. alloftheabove

4. Whichofthefollowingshouldpromptacashiertocallasupervisor?
a. acheckonwhichnumericalandwrittenamountsdonotagree
b. anoverlypolitecustomer
c. achecktransitnumberintheupperrighthandcornerthatdoesnot
matchtheelectronicallyencodednumberatthebottomofthecheck
d. alloftheabove

Testbank 4
MasteringInternalControlsandFraudProtection

Section4CREDITCARDFRAUD

1. Agoodpolicyforacompanyforcompanycreditcardsrequires:
a. vendorreceiptsforallitemscharged
b. receiptsandreimbursementofpersonalexpensesnotauthorizedby
companypolicy
c. nopersonalexpenseschargedonthecardunlessauthorizedby
companypolicy
d. aandc

2. AmericanExpresscardstypicallyhave:
a. microprintingthatappearstothenakedeyetobeasolidline
b. 16digits
c. thenumbersonthesignaturepanelthatslantleftandmatchthe
numbersonthefrontofthecard
d. noneoftheabove

3. Whichcreditcardhasafourdigitidentificationnumberthatappears
abovetheaccountnumberonthefrontinsidethescrollworkontheright?
a. AmericanExpress
b. Visa
c. MasterCard
d. bothbandc

4. Whichcreditcardhasathreedigitcardverificationnumberprintedon
thebackofthecard?
a. AmericanExpress
b. Visa
c. MasterCard
d. bothbandc

5. Whichcreditcardhasacenturionvisibleunderblacklight?
a. AmericanExpress
b. Visa
c. MasterCard
d. bothbandc

6. Creditcardfraudinvolvingfillingoutmultipleblanksalesslipsusing
thecardisknownas:
a. skimming
b. truenamefraud
c. merchantscamming
d. nonreceiptfraud

Testbank 5
MasteringInternalControlsandFraudProtection

Section5HOWVENDORSCHEATYOU

1. Ifcalledbyamerchandiser,youshouldbeskepticalofallofthe
followingexcept:
a. alastchanceoffer
b. abusinessyouhaveneverheardof
c. arequirementforasmalldownpayment
d. lackofawrittencontract

2. Agoodsourceforfindingalistofcommonfraudscamsandtheir
warningsignsisthe:
a. FederalBureauofInvestigation
b. BetterBusinessBureau
c. NationalFraudInformationCenter
d. FederalTradeCommission

3. Thebestprotectionforacompanyagainsttelemarketingscamsis:
a. threateningtocomplaintolawenforcementthenactuallyfilinga
complaint
b. suingthefraudster
c. prevention
d. bothaandb

Notetoinstructor:ThefollowingquestionistakenfromAppendixA.

4. Onewaytopreventemployeecollusionwithadishonestvendoristo:
a. Makesuretheemployeeprocuringtheservicesisnottheone
issuingthepayment
b. notpayaninvoicethatlackstheorderingemployeesinitials
withoutfindingoutwhethertheserviceswereperformedorthe
goodsreceived
c. callthevendornomatterhowlongyouhavebeenusingitif
anythinglooksoutoforder
d. alloftheabove

Testbank 6