Accounting Information Systems Exam
Bank
Course Introduction
Accounting Information Systems explores the development, implementation, and control of information systems in the accounting environment. This course examines how accounting information is collected, processed, stored, and communicated within organizations to support decision-making and ensure compliance with reporting standards. Topics include system documentation, internal controls, risk assessment, data security, and the role of information systems in supporting both financial and managerial accounting functions. Students will also learn about current technologies, such as enterprise resource planning (ERP) systems, and their impact on business processes.
Recommended Textbook
Fraud Examination 3rd Edition by W. Steve Albrecht
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18 Chapters
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Page 2
Chapter 1: The Nature of Fraud
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Sample Questions
Q1) Which of the following is not a true statement with regard to fraud:
A) Confidence is the single most critical element for a fraud to be successful
B) Losses from fraud exceed losses from robbery
C) The largest group of fraud perpetrators are over fifty
D) All of the above are true
Answer: C
Q2) Vendor fraud usually results in all of the following except:
A) An overcharge for purchased goods
B) The shipment of inferior goods
C) Non-payment of goods by customers
D) Non-shipment of goods even though payment has been made.
Answer: C
Q3) Indirect fraud occurs when-
A) Embezzled money is transferred to your relative's account
B) Misuse of company equipment ( i.e. surfing the web during work hours)
C) Receiving a kickback from a vendor
D) Paying for unapproved lunches with the company expense account.
Answer: C
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3
Chapter 2: Why People Commit Fraud
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Sample Questions
Q1) The following are all types of power except:
A) Persuasive power
B) Referent power
C) Legitimate power
D) Coercive power
Answer: A
Q2) Which of the following is a Non-control Factor?
A) Ability to judge the quality of performance
B) Ignorance, apathy, & Incapacity
C) Access to Information
D) None of the above
Answer: B
Q3) Generally, internal controls are implemented in a corporation to help prevent which element of the fraud triangle?
A) Perceived opportunity
B) Perceived pressure
C) Rationalization
D) None of the above
Answer: A
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Page 4
Chapter 3: Fighting Fraud: An Overview
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Sample Questions
Q1) Which is not one of the three basic elements of fraud?
A) Concealment
B) Theft
C) Opportunity
D) Conversion
Answer: C
Q2) An example of kickback fraud is:
A) Fraud perpetrated by an employee and the vendor
B) Fraud perpetrated by two or more employees
C) Fraud that conceals cash shortages by transferring funds
D) None of the above
Answer: A
Q3) Evidence that is gathered using interviewing techniques is referred to as:
A) Physical evidence
B) Interview evidence
C) Testimonial evidence
D) Observation evidence
Answer: C
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Chapter 4: Preventing Fraud
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Sample Questions
Q1) True or false: The majority of frauds committed against companies involve collusion.
A)True
B)False
Q2) Which factors are crucial in creating a culture of honesty, openness, and assistance?
A) Hiring honest people and training them in fraud awareness
B) Creating a positive work environment
C) Disseminating a well understood and respected code of conduct or ethics
D) All of the above
Q3) The following are (is a) good control(s) for preventing fraud
A) Physical control/proper authorization
B) Segregation of Duties
C) Independent checks
D) Documents and records
E) Both A and B
Q4) Most frauds are committed by
A) Individuals
B) Groups
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Chapter 5: Recognizing the Symptoms of Fraud
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Sample Questions
Q1) An insurance company received claim forms from 22 phony doctors. The forms all originated from two addresses: a post office box and a business located in a nearby city and owned by the manager's husband. The manager used a limousine to pick up fellow employees from an expensive restaurant. What fraud symptoms are mentioned in this scenario?
A) Accounting anomalies
B) Extravagant lifestyles
C) Internal control weaknesses
D) Both a and b
E) All of the above
Q2) A faulty journal entry is an example of which kind of fraud symptom?
A) Accounting anomalies
B) Internal control weaknesses
C) Unusual behaviors
D) Analytical anomalies
Q3) Upon committing fraud, what do most people do with excess funds?
A) Put them in savings
B) Spend them on extravagant items
C) Donate them to charities
D) Slowly give them back to the company
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Chapter 6: Data-Driven Fraud Detection
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Sample Questions
Q1) SRD does all of the following except:
A) Detect potential collusion between employees and vendors
B) Identify suspect relationships between employees and customers
C) Locate repeat risk management claims across a corporation
D) Identify suspect relationships between upper management and other employees
E) Find employees or clients who are "in cahoots" with lists of known criminals
Q2) In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. All of the following are possible explanations except:
A) Inventory costs rose faster than sales prices.
B) Inventory is being stolen.
C) The accounting records are not accurate.
D) All of the above are possible explanations.
Q3) Which of the following types of software is commercial data-mining software?
A) Audit command language (ACL)
B) QuickBooks
C) Peachtree
D) Excel
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Chapter 7: Investigating Theft Acts
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Q1) Locating a scene to be observed, anticipating the actions that are most likely to occur at the scene, and keeping detailed notes on tape or film is:
A) Static surveillance
B) Electronic Surveillance
C) Stationary surveillance
D) Moving surveillance
Q2) Invigilation is
A) A theft investigation technique that analyzes physical evidence
B) A theft investigation technique that closely supervises suspects closely
C) A type of undercover operation
D) Interviewing the suspect at the beginning of the investigation
Q3) Theft investigation usually begins with which of the following.
A) Involve very few people and avoid using words like 'investigation'
B) Interview the prime suspect
C) Interview other buyers, co-workers, etc.
D) Inform employees that an investigation is under way.
Q4) Surveillance is usually used to investigate
A) Theft acts
B) Concealment
C) Conversion
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Chapter 8: Investigating Concealment
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Q1) An audit is a method of what investigation?
A) Theft Investigation
B) Conversion Investigation
C) Concealment investigation
D) Inquiry Investigation
Q2) Which of the following terms describes the risk that the sample is not representative of the population?
A) Errors
B) Non-sampling risk
C) Sampling risk
D) Detection risk
Q3) DocLab is a division of which organization?
A) US Marshals
B) FBI
C) CIA
D) ACFE
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Page 10
Chapter 9: Conversion Investigation Methods
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Sample Questions
Q1) Why is the net worth method advantageous?
A) It is conservative
B) It can be used in court
C) It can help calculate all amounts embezzled
D) Both A and B
Q2) Which of the following government agencies does not typically use the net worth method to detect fraud?
A) Internal Revenue Service
B) Federal Bureau of Investigation
C) Social Security Administration
D) Drug Enforcement Agency
Q3) When investigating conversion the 'financial footprints' that fraud investigators are looking for are?
A) Purchase of assets
B) Changes in lifestyles
C) Changes in net worth
D) All of the above
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11
Chapter 10: Inquiry Methods and Fraud Reports
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Sample Questions
Q1) Which of the following is not a characteristic of a good interview?
A) The interview is of sufficient length and depth to get relevant facts
B) The interview quickly gets to the focus
C) Interview is conducted as far away from the event as possible
D) Interviewer avoids unnecessary facts
Q2) _______________________ refers to the use of time in interpersonal relationships to convey meaning, attitudes and desires?
A) Proxemic communication
B) Chronemic Communication
C) Kinetic communication
D) Paralinguistic communication
Q3) Which of the following are TRUE concerning signed statements?
A) Allow the confessor to draft the statement,
B) The statement's wording should be general,
C) Declarants should read and sign the statement without undue delay,
D) Two people are legally required to witness the signing of the statement
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Chapter 11: Financial Statement Fraud
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Sample Questions
Q1) Your firm has just acquired a new audit client. The new client is a company that is highly leveraged and has debt with several institutions. The new client is also planning on expanding its business and wants to obtain additional debt financing in the near future. Based on these facts, which one of the following should be most carefully examined?
A) Large transactions that result in revenues and/or income
B) Loans and other financing transactions between related entities
C) Large amounts of goodwill on the balance sheet
D) Recent change in credit policies
Q2) Which of the following is not part of the fraud exposure rectangle?
A) Accounting system controls
B) Management and Directors
C) Financial results and operating characteristics
D) The organization and its industry
E) All of the above are parts of the fraud exposure rectangle
Q3) Lifestyle changes are usually not factors in detecting
A) investment scams.
B) kickback schemes.
C) bankruptcy fraud.
D) financial statement fraud.
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Chapter 12: Revenue- and Inventory-Related Financial
Statement Frauds
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Q1) Which of the following is not a typical symptom of revenue fraud?
A) managers and other company officers are living a lavish lifestyle
B) management overrides significant internal control activities related to the revenue cycle
C) revenue-related ledgers do not balance
D) the company has numerous large customers
Q2) Which of the following is most likely to be indicative of a potential revenue fraud?
A) a sudden increase in the sales discount percentage
B) a high sales return percentage
C) a rapidly increasing asset turnover ratio
D) a rapidly decreasing working capital turnover ratio
Q3) __________ involves examining percentage changes in account balances from period to period.
A) Horizontal analysis
B) Change statement analysis
C) Ratio analysis
D) None of the above
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Page 14
Chapter 13: Liability, Asset, and Inadequate Disclosure
Frauds
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Q1) When examining whether a company has under recorded accounts payable, each of the following ratios will be helpful except:
A) Acid-test ratio
B) Accounts Payable ÷ Purchases
C) Accounts Payable ÷ Cost of Goods sold
D) Unearned revenue ÷ Accounts Payable
E) Current Ratio
Q2) Which of the following expenditures would be most suspicious if it were capitalized?
A) Equipment purchases
B) Computer purchases
C) Prepaid expenses
D) Salaries for top management
Q3) You observe that a company's current ratio is dramatically increasing. This may indicate fraud in that:
A) Contingent liabilities are not recorded.
B) Accounts payable is understated.
C) Expenses have been inappropriately capitalized as assets.
D) Fixed assets are overstated.
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Chapter 14: Fraud Against Organizations
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Q1) Skimming is easier to detect than larceny because
A) Cash is stolen after it has been recorded in the company's accounting system
B) Cash is stolen before it has been recorded in the company's accounting system
C) Skimming involves fraudulent cash receipts
D) Skimming is not easier to detect than larceny
Q2) When suppliers are engaged in bid-rigging, they vie for contracts in cutthroat environments, and usually only gain an advantage over competitors through bribing an employee with inside influence.
A) True
B) False
Q3) A conflict of interest is corruption that can be defined as:
A) Offering, giving, receiving or soliciting anything of value in order to influence an official act
B) Corrupt employees demand payments from vendors for deciding in the vendors' favor
C) Corrupt employees are rewarded for making favorable decisions
D) The employee has an undisclosed economic or personal stake in a transaction that adversely affects the company
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Chapter 15: Consumer Fraud
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Sample Questions
Q1) Snake Oil plans are plans that usually include:
A) Animal byproducts
B) Miracle products
C) Internet-based, service products
D) Immaterial products
Q2) A Nigerian money offer scam normally does all of the following, except:
A) States the need for urgent assistance
B) Makes the victim feel like he or she is the only recipient of the offer
C) Uses the traditional mail system to increase believability
D) Tries to build a relationship of confidence with the recipient
Q3) Which of the following method involves using the Internet to steal information?
A) Shoulder surfing
B) Phishing
C) Skimming credit cards
D) Rummaging through a victim's trash
Q4) Which act provides exact procedures for correcting mistakes on credit reports?
A) Fair Credit Billing Act
B) Fair Debt Collection Practices Act
C) The Gramm-Leach-Bliley Act
D) Fair Credit Reporting Act
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Chapter 16: Bankruptcy, Divorce, and Tax Fraud
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Q1) Which of the following is one of the Court-Appointed or Panel Trustee's duties or characteristics?
A) Investigate the acts, conduct, liabilities, assets, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of that business.
B) Approve reorganization plans
C) Administering bankruptcy cases and reviewing employees and fee applications.
D) Holds a valid claim against a debtor.
Q2) Which of the following statements is true concerning divorce cases?
A) Bankruptcy laws and statutes are much simpler than divorce laws and statutes
B) Divorce fraud never involves hiding or transferring assets
C) Most divorce cases are civil cases, with no criminal charges filed
D) It is illegal for divorce attorneys to hire investigators to help them find hidden assets
Q3) Government statistics estimate that losses to creditors from bust-outs amount to:
A) $100,000/day
B) $1 billion/year
C) $1 million/ year
D) $10,000/day
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18
Chapter 17: Fraud in E-Commerce
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Sample Questions
Q1) Which is not a method of preventing fraud through control activities
A) Separation of Duties
B) Sniffing
C) Authorization of transactions and activities
D) Physical control over assets and records
Q2) Traditional ___ reduces the risk of falsified identity.
A) CSS (Cascading Style Sheets)
B) EDI (Electronic Data Interchange)
C) WWW (World Wide Web)
D) SQL (Structured Query Language)
Q3) A risk assessment should:
A) Identify the risk of doing business with e-business partners
B) Focus only on financial data
C) Be avoided at all cost
D) Cover only non-technological areas
Q4) Passwords, biometrics, and digital signatures are examples of:
A) Physical controls
B) Segregation of duties
C) Authorization controls
D) Checks on performance
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Chapter 18: Legal Follow-Up
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Q1) Which of the following is a written order in the name of the court that requires a witness to submit to give testimony at trial?
A) A deposition
B) A subpoena
C) A production request
D) None of the above
Q2) Under which body of law must juries rule unanimously on guilt for the perpetrator to be convicted?
A) Civil Law
B) Martial Law
C) Murphy's Law
D) Criminal Law
E) Case Law
Q3) All of the following are true with regards to civil law except:
A) It provides remedies for violations of private rights
B) It deals with rights and duties between individuals
C) It begins when one party files a claim for restitution from another
D) Court proceedings are heard by a grand jury
E) All of the above are true concerning civil law
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