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| Section | Weight | Objectives |
|---|---|---|
| Accounting Concepts | 5–10% | - Internal control fundamentals - Basic accounting principles - Financial statements structure - Recording and summarizing transactions |
| Financial Statement Fraud | 10–15% | - Detection and red flags - Expense and liability understatements - Revenue and asset overstatements - Timing and disclosure manipulations |
| Theft of Data and Intellectual Property | 5–10% | - Corporate espionage - Safeguarding proprietary information - Data and IP theft methods |
| Industry-Specific Financial Crimes | 15–25% | - Cyber-enabled and cryptocurrency fraud - Insurance fraud - Financial institution fraud - Real estate and securities fraud - Healthcare fraud |
| Asset Misappropriation – Cash Disbursements | 10–15% | - Payroll schemes - Check and payment tampering - Billing schemes - Expense reimbursement schemes |
| Identity Theft | 1–5% | - Prevention and detection - Types and techniques |
| Asset Misappropriation – Non-Cash Assets | 5–10% | - Misuse of assets - Inventory and equipment theft - Concealment techniques |
| Corruption Schemes | 5–10% | - Bribery and kickbacks - Illegal gratuities and extortion - Conflicts of interest |
| Asset Misappropriation – Cash Receipts | 5–10% | - Cash skimming schemes - Prevention and detection methods - Cash larceny schemes |
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NEW QUESTION # 97
Which of the following statements is TRUE regarding an analytical review of financial statements in relation to inventory theft?
Answer: A
Explanation:
Option D is correct because analytical review can reveal inventory theft when cost of goods sold changes disproportionately compared with sales. If inventory is stolen, the organization may experience higher inventory shrinkage or cost of goods sold without a corresponding increase in sales revenue. The ACFE material identifies analytical review, physical inventory counts, perpetual inventory records, and shipping- document review as methods for detecting inventory schemes. Option A is incorrect because analytical review can help identify unusual relationships or trends. Option B is weak because unchanged sales and unchanged cost of goods sold do not indicate a loss pattern. Option C is too absolute; changes in cost of goods sold must be evaluated in relation to sales, business conditions, and other explanations.
NEW QUESTION # 98
Which of the following is an example of a cash larceny scheme ?
Answer: A
Explanation:
The ACFE Manual treats Cash Larceny under Asset Misappropriation: Cash Receipts , and specifically identifies "Theft of Cash from the Register" as a cash larceny scheme.
Cash larceny differs from skimming because in a larceny scheme, the cash has already been recorded on the books before it is stolen. By contrast, skimming occurs before the cash is recorded. The Manual separately covers Skimming and includes schemes such as understated sales , showing that skimming involves stealing cash receipts without fully recording the transaction.
Why C is correct
In Option C, Scott performs a No-Sale transaction, opens the drawer, and removes cash directly from the register. This is the clearest example of theft of cash from the register , which the Manual classifies as cash larceny .
Why the other options are incorrect
A). Laura pretends to record a sale, steals the cash, and gives the customer the merchandise without recording the sale.
This is skimming , not cash larceny, because the sale is never recorded. The Manual treats unrecorded sales thefts under Skimming .
B). Olive records a $400 sale on a $500 purchase and steals the extra $100.
This is also skimming , specifically an understated sales type of scheme, because the full amount of the sale is not recorded. The difference is diverted before complete recording.
D). Michael records a fictitious return and takes $50 from the register.
This is not cash larceny. It is a register disbursement scheme , specifically a fictitious refund , which the Manual covers under Fraudulent Disbursements .
Conclusion
Because Option C involves taking cash directly from the register after access is obtained through a No-Sale transaction, it is the best example of cash larceny under the ACFE Manual.
References
* ACFE Fraud Examiners Manual, 2020 International Edition
* Asset Misappropriation: Cash Receipts - Cash Larceny / Theft of Cash from the Register
* Asset Misappropriation: Cash Receipts - Skimming / Understated Sales
* Fraudulent Disbursements - Register Disbursement Schemes / Fictitious Refunds
NEW QUESTION # 99
A typical issue involving materiality and fraud would be:
Answer: C
Explanation:
Detailed Explanation:
* Rationale for Correct Answer: Materiality is most often associated with fraudulent financial statements because fraudsters may argue that misstatements are "immaterial." However, deliberate misstatements of any size can be fraudulent. Materiality thus plays a critical role in assessing fraudulent statement cases .
* Analysis of Incorrect Options:
* B. Misappropriations - Involve theft, but materiality is less central than in reporting fraud.
* C. Civil lawsuit - A possible outcome, not the core accounting issue.
* D. Quality control - Not related to materiality in fraud.
* Key Concept: Materiality in Financial Statement Fraud - even small misstatements may be fraudulent.
Reference: ACFE Fraud Examiners Manual (2020 International Edition) , Financial Statement Fraud - Materiality and Misstatements .
NEW QUESTION # 100
Karen is investigating an anonymous tip within Magenta Company that a billing scheme might be occurring in the Purchasing Department. Which of the following steps would be MOST EFFECTIVE in helping Karen discover whether billing fraud is occurring?
Answer: A
Explanation:
The correct answer is A. Billing schemes often exploit weak segregation of duties in purchasing, receiving, and payment functions. If one person or department can request goods, approve receipt, authorize payment, and process invoices without independent verification, fictitious invoices, pass-through schemes, personal purchases, or inflated vendor billings are easier to conceal. Karen should therefore determine whether these functions operate independently. Option B is not the strongest choice as written because identifying employees with the same phone number does not directly test vendor billing fraud. Customer complaints about sales policies relate to revenue or consumer issues, not purchasing fraud. Accounts receivable and credit sales analysis is more relevant to revenue fraud. The ACFE materials classify billing schemes under fraudulent disbursements and emphasize purchasing, receiving, and invoice controls.
NEW QUESTION # 101
Which of the following statements concerning methods that corporate spies use to steal information from other organizations is MOST ACCURATE?
Answer: A
Explanation:
The correct answer is D. Technical surveillance involves using electronic or technical means to collect information that is not available through open sources, including nondocumentary information such as conversations, signals, or communications. This is a recognized method of corporate espionage when used to obtain proprietary or confidential business information. Option A is too narrow and inaccurate because social engineering manipulates people into revealing information or providing access, not primarily desk-file searches. Option B misstates physical infiltration; physical entry can give access to premises, documents, or devices, but exploiting firewalls is a technical attack. Option C incorrectly defines pretexting; pretexting involves using a false identity or fabricated reason to obtain information. Corporate espionage must be distinguished from lawful competitive intelligence.
NEW QUESTION # 102
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