BT Ch-17

Which of the following is a skimming fraud?

• A large amount is 'skimmed' off the top of a large sales invoice as a kickback to the

  purchaser

• Small amounts are diverted from a large number of transactions

• Invitation to pay a sum of money now in order to secure a large return in the future

• Submission of invoices which contain inflated amounts

'Teeming and lading' is used to describe which of the following:

• Where money flows are so substantial that diversion of large sums can go unnoticed

• A fraud where purchase ledger payments are misdirected to overseas accounts

• A personal expenses fraud involving fictitious expense vouchers

• A fraud where receipts from customers are misappropriated

'Window dressing' involves which of the following:

• Producing an overly detailed set of annual accounts in years when underlying results

  are poor

• Entering into transactions just before the year-end that will improve the appearance

  of the accounts but will be reversed out soon after

• Setting up bogus employees on the payroll system and paying their 'salary' into a

  specially created bank account

• Misappropriation of business assets by managers

Off balance sheet accounting refers to which of the following:

• A focus on income and expenditure rather to the detriment of asset and liability

  management

• Removal of business assets by employees for their own personal use

• Diversion of assets from the balance sheet to a personal bank account

• Deliberate exclusion of certain assets and liabilities from the published balance sheet

Consider the following two statements:

1. 1. A comprehensive system of control will eliminate all fraud and error.

2. 2. Employees working in departments other than Accounts have no responsibility for

reporting fraud.

Which of these options is/are correct?

• I only

• 2 only

• Both

• Neither

If an external auditor in the process of considering the company's financial statement came

across an incident of fraud that took place in the year, he/she must:

• qualify the accounts regardless of the size of the fraud

• report to the shareholders by way of a note to the accounts, regardless of the size of

  the fraud

• qualify the accounts only if the fraud is material and not properly recorded in the

  accounts

• report to the shareholders by way of a note to the accounts, but only if the fraud is

  material

Which of the following behaviours is often associated with an employee possibly

committing fraud?

• Managers and staff having monthly meetings to discuss underperformance

• Employee frequently taking time off work for personal reasons

• A member of the Finance team frequently buying new expensive cars despite only

  earning a moderate salary

• Member of HR team being keen to take part in discussion on staff remuneration

Which of the following is NOT a control or procedure required by standard money

laundering legislation?

• Identification of large or unusual transactions

• Taking steps to ensure customers can be identified

• Reporting of all large or unusual transactions to the relevant authorities

• Creation of the role of Nominated Officer

Money laundering legislation only covers illegally obtained cash and other liquid assets, such

as short-term investments and bonds.

Is this statement TRUE or FALSE?

• True

• False

Under typical money laundering legislation, the main offences recognised are: placement,

layering and integration.

Is this statement TRUE or FALSE?

• True

• False