Fraud schemes, red flags, and detection and prevention techniques tested on the Certified Fraud Examiner (CFE) exam.
39 cards · basic cards · AI-written, checked twice. Edit anything.
- What are the three elements of the fraud triangle?
- Pressure (motivation), Opportunity (ability), and Rationalization (justification)
- In the fraud triangle, what does 'pressure' represent?
- A financial or emotional need that motivates someone to commit fraud
- In the fraud triangle, what does 'opportunity' represent?
- A weakness in controls that makes fraud possible
- In the fraud triangle, what does 'rationalization' represent?
- The fraudster's ability to justify the dishonest act to themselves
- Define asset misappropriation.
- The theft of an organization's assets such as cash, inventory, or property
- Define corruption fraud.
- Illegal schemes involving bribery, extortion, or conflict of interest to gain personal advantage
- Define financial statement fraud.
- Intentional misstatement or omission of amounts or disclosures in financial statements
- What is check fraud?
- Forging or altering checks to steal funds from the organization
- What is skimming?
- Removing cash from a register or business before it is recorded in the accounting system
- What is cash larceny?
- The theft of cash after it has been recorded in the accounting system
- What is a ghost employee fraud scheme?
- Adding fictitious employees to the payroll to receive salary or wage payments
- What is timesheet padding?
- Recording more hours worked than actually worked to steal wages or salary
- What is inventory fraud?
- Theft of inventory or falsification of inventory records to conceal theft
- What is accounts receivable fraud?
- Writing off customer accounts as uncollectible to conceal theft of customer payments
- What is expense reimbursement fraud?
- Submitting false or inflated expense reports to obtain unauthorized reimbursement