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What is the order of stages that people go through in reaction to a crisis
- 1. Denial
- 2. Anger
- 3. Rationalization
- 4. Depression
- 5. Acceptance
specific guidelines for a successful interviewer, except:
- a. maintain full control of the interview.
- b. require direct responses.
- d. clearly understand each answer before continuing with the interview.
types of questions is used in routine interviews
Inhibitors of conversation
- inferntial confusion
"Is this the first time you have taken from the company? Is this the
first time you have created an overdraft?" are an example of what type
as a general rule should not include words such as "lie" and "steal."
The study of handwriting for the purpose of character analysis is:
How body movements convey meaning is the study of:
deliberately changing stock options for the purpose of securing extra pay for management.
financial statement fraud is easiest to commit in organizations that
have complex organizational structures.
the fraud exposure rectangle
- 1. management and directors
- 2. relationships with others
- 3. organization and industry
- 4. financial results and operating characteristics
Generally accepted accounting principles
allow for companies to exploit loopholes in the standards.
committing financial statement fraud is easiest when...
...decision making is done by one or two individuals.
special purpose entities are..
business interests formed solely to accomplish a specific task or tasks.
an 8-k is filed with the SEC when...
there has been a change of auditors for the company.
Channel-stuffing, lapping, and round-tripping are all forms of:
revenue related fraud schemes
- period 2 - period 1/period 1
- the difference between period 2 and period 1's account balance divided by period 1
ways to understate accounts payable
- -overstate purchase returns
- -make it appear as if liabilities have been paid off when they really have not
- -not record purchases
Computing each liability as a percentage of total assets is known as
common sized financial statements
ways to actively search for "accounting and documentary" symptoms of under-reporting of liabilities fraud?
- a. More inventory counted than identified through purchasing and inventory records. b. Discrepancies in cut-off tests.
- c. Amounts listed on vendor statements not recorded as purchases.
Under-reporting depreciation expense can be accomplished by
establishing useful lives for assets that exceed their true expected lives.
Overstatement of asset fraud can be perpetrated through:
- a. depreciation methods.
- b. asset impairment
- c. capitalization of expenditures.
understatement of liability frauds
can be accomplished by recording accruals in a later period.
ways to understate liabilities
- -understate accounts payable
- -failure to record warranty obligations
- -ommission of contingent liabilities
Asset misappropriation involves:
- -misuse of inventory
the most common type of billing schemes
altering or double-paying non-accomplice vendor statements.
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