Webclass 68: How to cover off the most obvious fraud schemes – mapping to the Certified Fraud Examiner content

Q1. Is the auditor responsible for assessing the adequacy and effectiveness of risk management, control and governance processes?

Yes

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No

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Q2. Is the auditor responsible for assessing the probability of errors / irregularities or non-compliance?

Yes

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No

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Q3. What is the best method of prevention?

The perception of detection

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Data analytics

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Q4. What are the three main branches of the fraud tree?

Corruption/ Asset Misappropriation/ Financial Statement Fraud

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Larceny/ Skimming/ Billing schemes

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Q5. Corruption is off the books, so it cannot be detected with data analytics?

True

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False

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Q6. What is typically used as bribes for corruption?

T&E/ Commissions/ Fictitious invoices for consulting fees/ Cash/ Cheques/ Ghost employees

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Threatening the customer to purchase products

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Q7. How can we identify inventory leakage?

Gaps between physical inventory and perpetual inventory/ inventory adjustments and high revenue/ COGS ratio

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By ensuring that we do annual physical inventory rather than cyclical physical inventory

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Q8. What could be indicative of a shell company?

Sequential supplier invoice numbers/ Vendors that have similar information to employees/ Vendors always working with one employee/ Vendors that are always the same for a particular product without any Call For Tender/Unusually high prices

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Suppliers that sell at very low prices

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Q9. What is an example of asset misuse?

When a truck is used at night for a parallel business

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When inventory is written off as scrap

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Q10. Why might we be concerned if we see purchases for inventory items that were recently scrapped?

Because someone might be intentionally scrapping in order to misappropriate inventory

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Because it could mean that the quality of the products from the supplier are not good

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Q11. Why is it essential for the data auditors to be able to do journal entry analysis?

Because the data auditor needs to be able to check for accounting schemes that could be used to cover up unauthorized transactions, such as fictitious revenues

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Because the data auditor needs to be able to calculate the financial statements

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Webclass 68: How to cover off the most obvious fraud schemes – mapping to the Certified Fraud Examiner content

Webclass 68: How to cover off the most obvious fraud schemes – mapping to the Certified Fraud Examiner content

admin June 9, 2026

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