1. One way that criminal law differs from civil law is that it:

1. One way that criminal law differs from civil law is that it:

• provides remedies for violations of private rights.
• must yield a unanimous verdict.
• can have a jury of fewer than 12 persons.
• allows for various claims in one action.

ANSWER: b

FEEDBACK: a. Incorrect. This is a characteristic of civil law; criminal law deals with crimes against the public.

• Correct. Criminal trials must result in an unanimous verdict.
• Incorrect. This is a characteristic of civil law; criminal trial juries must have 12 persons.
• Incorrect. This is a characteristic of civil law; criminal law permits only one claim at a time.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-5 -

LO: 1-5

NATIONAL STANDARDS: United States - BUSPROG

STATE STANDARDS: United States - Illinois - AICPA - BB-Legal

KEYWORDS: Bloom's: Remembering

• Which of the following is NOT an element of a Ponzi scheme?
• Gaining other's confidence.
• Promising abnormally high returns.
• Collected money is invested.
• Investment principle is partially used to make payments to previous investors.

ANSWER: c

FEEDBACK: a. Incorrect. This is one of the most important elements of the 'con'.

• Incorrect. This is how fraudsters lure in investors.
• Correct. This is very unlikely.
• Incorrect. The original principle is often used to make interest payments.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology STATE STANDARDS: United States - Illinois - AICPA:BB - Resource Management

KEYWORDS: Bloom's Remembering CengageLearningTesting,PoweredbyCogneroPage1

(Fraud Examination, 5e Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark Zimbleman) (Test Bank all Chapters) Chapter 1 1 / 4

3. The following are all elements of Title 26, U.S. Code Section 7201 EXCEPT:

• not reporting bribe income may be grounds for being charged with tax evasion.
• filing income tax that excludes income from fraud may be considered an improper tax filing.
• bribes paid may be deducted as business expenses.
• failure to report income from fraud may be grounds for being charged with tax evasion.

ANSWER: c

FEEDBACK: a. Incorrect. Not reporting bribe income may be grounds for being charged with tax evasion.

• Incorrect. Filing income tax that excludes income from fraud may be considered an improper tax

filing.

• Correct. Bribes cannot be deducted as legitimate business expenses.
• Incorrect.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology

STATE STANDARDS: United States - Illinois - AICPA; - BB-Legal

KEYWORDS: Bloom's: Understanding

• Which one of the following is NOT a characteristic of a criminal proceeding?
• Deals with offenses against society.
• Consequences include restitution and damage payments.
• Jury of 12 individuals.
• Only one claim may be heard at a time.

ANSWER: b

FEEDBACK: a. Incorrect. A crime is considered as an offense against society as a whole.

• Correct. In a criminal proceeding, the consequences are jail and/or fines.
• Incorrect. A criminal jury consists of 12 jurors.
• Incorrect. Only one claim is heard at a time, whereas in a civil case many claims may be joined into

one action.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: LO: 1-5 -

LO: 1-5

NATIONAL STANDARDS: United States - BUSPROG

STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal KEYWORDS: Bloom's: Understanding CengageLearningTesting,Poweredby CogneroPage 2 2 / 4

5. Management fraud is often referred to as:

• stockholder fraud.
• financial statement fraud.
• employee fraud.
• investment fraud.

ANSWER: b

FEEDBACK: a. Incorrect.

• Correct.
• Incorrect.
• Incorrect.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal KEYWORDS: | Bloom's: Remembering

• What is required to prove fraud, as opposed to negligence?
• Gross error
• Intent
• Preponderance of the evidence
• Confession from the perpetrator

ANSWER: b

FEEDBACK: a. Incorrect. Gross error is not sufficient evidence to prove fraud.

• Correct.
• Incorrect. This is what is proven in a civil case.
• Incorrect. Confession is not required to prove fraud. In fact, many perpetrators never admit their guilt.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-5 -

LO: 1-5

NATIONAL STANDARDS: United States - BUSPROG: - Technology STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal KEYWORDS: Bloom's: Understanding CengageLearningTesting,Poweredby CogneroPage 3 3 / 4

• Which of the following is the most common type of occupational fraud?
• Financial statement fraud
• Mail fraud
• Investment fraud
• Employee embezzlement

ANSWER: d

FEEDBACK: a. Incorrect.

• Incorrect.
• Incorrect.
• Correct.

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal KEYWORDS: Bloom's: Remembering

• Which of the following is NOT a characteristic of management fraud?
• Top management deception.
• Manipulation of financial statements.
• Kickbacks or bribes.
• Pressure to earn year-end bonuses.

ANSWER: c

FEEDBACK: a. Incorrect. Management fraud often involves top management's deceptive manipulation.Management fraud is when the top management deceives stockholders.

• Incorrect. Management often uses the manipulation of financial statements to commit fraud. This is

one of the easiest ways to commit a large fraud.

• Correct. These are examples of employee embezzlement. Management fraud usually deals with

financial statement manipulation.

• Incorrect. Many managers commit fraud to receive large bonuses that are dependent upon financial

performance.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: LO: 1-3

NATIONAL STANDARDS: United States - BUSPROG: - Technology STATE STANDARDS: United States - Illinois - AICPA: - BB-Legal KEYWORDS: Bloom's: Remembering CengageLearningTesting,Poweredby CogneroPage 4

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