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CA Final Accounting Scandal — practice questions

Explore 50 free Accounting Scandal questions in CA Final Auditing. Open each question or exercise to read its content, reference answers and available explanation.

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Accounting Scandal questions and exercises with answers

Showing questions 1–30 of 50.

Another name for employees stealing a company's cash or inventory is:Read the answer and worked solution →Fraudulent financial reporting by management is also known as:Read the answer and worked solution →Which element does the fraud diamond add to the three sides of the fraud triangle?Read the answer and worked solution →The fraud pentagon extends the fraud diamond by adding which trait?Read the answer and worked solution →A cashier with heavy gambling debts steals daily takings. Which side of the fraud triangle is this mainly?Read the answer and worked solution →Weak vendor payment controls let a clerk bill a fake vendor. Which triangle element?Read the answer and worked solution →A CEO obsessed with meeting analyst forecasts signals mainly:Read the answer and worked solution →Fraud risk in financial statements is greater where:Read the answer and worked solution →Asset theft is easiest where assets are:Read the answer and worked solution →Which absence in a company signals vulnerability to embezzlement?Read the answer and worked solution →Which audit firm was convicted in June 2002 over its audit of Enron?Read the answer and worked solution →Which US law followed the wave of accounting scandals such as Enron and WorldCom?Read the answer and worked solution →Who discovered the first $3.8 billion of illicit entries at WorldCom?Read the answer and worked solution →Fraudulent financial reporting is often motivated by the wish to:Read the answer and worked solution →Which of these is a known form of fraudulent financial reporting?Read the answer and worked solution →A warehouse worker removes goods and sells them privately. This fraud is classed as:Read the answer and worked solution →Creative accounting typically follows the letter of accounting rules but:Read the answer and worked solution →Altering reports through judgment to mislead stakeholders is:Read the answer and worked solution →Tobashi schemes, which hide one firm's losses by moving liabilities between related companies, originated in:Read the answer and worked solution →Lehman Brothers' Repo 105 scheme worked by reporting a repurchase agreement as:Read the answer and worked solution →Goldman Sachs helped Greece hide an effective loan of about 1 billion euro by disguising it as:Read the answer and worked solution →Hollywood accounting is used by studios mainly to:Read the answer and worked solution →In law, fraud is best described as:Read the answer and worked solution →In common law jurisdictions, fraud as a civil wrong is treated as a:Read the answer and worked solution →The key element that makes fraud hard to prove in court is:Read the answer and worked solution →One civil remedy for a fraudulently induced contract is:Read the answer and worked solution →Fraud committed by an employee within the organisation is called:Read the answer and worked solution →Falsification of documents is known as:Read the answer and worked solution →A deliberate deception with no intention of gain or material damage is termed a:Read the answer and worked solution →Which statistical test is used in computer-based fraud detection because fraudsters favour certain amounts?Read the answer and worked solution →

Worked practice questions

Another name for employees stealing a company's cash or inventory is:

  1. Reperformance
  2. Window dressing
  3. Earnings smoothing
  4. Defalcation fraud
Show answer and solution

Correct answer: D. Defalcation fraud

Theft of cash, inventory or other assets by employees is called misappropriation of assets, also termed defalcation.

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Fraudulent financial reporting by management is also known as:

  1. Defalcation fraud
  2. Vendor kickback fraud
  3. Inventory skimming
  4. Earnings management fraud
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Correct answer: D. Earnings management fraud

When management deliberately manipulates policies or estimates to improve reported results, it is called earnings management fraud.

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Which element does the fraud diamond add to the three sides of the fraud triangle?

  1. Collusion of staff
  2. Concealment of facts
  3. Capability of the person
  4. Materiality of the loss
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Correct answer: C. Capability of the person

The fraud diamond adds capability, meaning the perpetrator's skills and position to exploit an opportunity.

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More Auditing topics

Auditor's ReportOverview of Audit of Public Sector UndertakingsInternal AuditStandards on Auditing and Professional EthicsInternational Ethics Standards Board for AccountantsRisk Assessment and Internal ControlSpecial Features of Audit of Banks and Non-Banking Financial CompaniesAuditor's Report on Financial Statements