Exam 6: Fraud and White-Collar Crime

A) Individuals will commit fraud when the reward is lower than the product of the probability of getting caught and the perceived gravity of the loss.
B) Individuals will commit fraud when the product of the probability of getting caught and the perceived gravity of the loss is greater than the reward.
C) Individuals will commit fraud when the product of the probability of getting caught and the perceived gravity of the loss is lesser than the reward.
D) Individuals will commit fraud when the perceived gravity of the loss is greater than the product of the probability of getting caught and the reward.

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False

A) Laviler, Inc. filed for bankruptcy after the banks refused to reschedule the repayment of loan dues.
B) Shay does not own any bank account or assets and keeps all his cash in his cupboard.
C) Kuriten, Inc. pays all her expenditures and debts in cash but insists on bank checks for all receipts.
D) Gisselle does not believe in accumulating assets and invests all her cash in mutual funds.

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A) understatement of losses
B) overvaluation of reserves
C) overstatement of revenues
D) undervaluation of liabilities

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A) Integrity, reflected in one's decisions, influences deviant behavior.
B) If incentive is present in an act, the suspect's capacity does not matter.
C) A suspect's capacity, not incentive, should be considered by the forensic accountant.
D) In addition to pressure, opportunity, and rationalization, offenders also need the capability to commit the act.

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A) Offenders choose courses of action such as fraud that produce optimal rewards regardless of the effort.
B) Specific crime is chosen through an analysis of opportunities and the cost-benefit trade-off.
C) Cost-benefit assessments are objective and rigid.
D) Objectivity of the decision process allows criminal behavior to be considered rational.

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A) to make oneself judgment-proof
B) to ensure that no further legal actions are faced
C) to protect oneself from being financially sued in the future
D) to avoid payment of restitution

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A) because these are victimless
B) because these do not involve violent acts
C) because it is a criminal offense
D) because it is the lowest standard of proof

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A) pressure, opportunity, and capability
B) opportunity, capability, and rationalization
C) pressure, opportunity, and rationalization
D) pressure, capability, and rationalization

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A) It states that individuals with low self-control consider the long-term consequences of their behavior.
B) It suggests that criminal motivation in and of itself results in a crime.
C) It is applicable to all types of crime, except white-collar crime.
D) It explains crime as a natural consequence of uncontrolled human desire to seek pleasure and avoid pain.

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A) They have an internal locus of control.
B) They hold a lower management position.
C) They have below-average intelligence.
D) They are relatively well-educated.

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D

A) use of force to persuade someone to surrender property
B) use of one's wealth to gain power and influence decisions
C) use of deception to persuade someone to surrender property
D) unintentional misrepresentation of financial statements

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A) It proposes rationale as a technique of rationalization.
B) Its techniques can only be used in combination, not singly.
C) It proposes condemnation as a technique of rationalization.
D) It opposes the rational choice theory.

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A) It provides "proof certain" of the actual intent of the subject.
B) It is a collection of fragmented evidence that supports one inference over another.
C) It is deemed highly reliable if alternative explanations do exist.
D) Its reliability is not affected by the degree of impact.

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A) Fraud is more likely to occur when there is high pressure, greater opportunity, and low personal integrity.
B) Fraud is more likely to occur when there is low pressure, lesser opportunity, and low personal integrity.
C) Fraud is more likely to occur when there is high pressure, lesser opportunity, and low personal integrity.
D) Fraud is more likely to occur when there is low pressure, greater opportunity, and low personal integrity.

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A) documentary evidence
B) character evidence
C) demonstrative evidence
D) circumstantial evidence

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D