The Nature of Fraud

Only available on StudyMode
  • Topic: Criminal law, Fraud, Civil law
  • Pages : 89 (13633 words )
  • Download(s) : 133
  • Published : April 1, 2012
Open Document
Text Preview
Chapter 1--The Nature of Fraud
 
MULTIPLE CHOICE
 
1. One way that criminal law differs from civil law is that it: a.| Provides remedies for violations of private rights.|
b.| Must yield a unanimous verdict.|
c.| Can have a jury of fewer than 12 persons.|
d.| Allows for various claims in one action.|
 
 
ANS: B
 
 | Feedback|
A| Incorrect. This is a characteristic of civil law; criminal law deals with crimes against the public.| B| Correct. Criminal trials must result in an unanimous verdict.| C| Incorrect. This is a characteristic of civil law; criminal trial juries must have 12 persons.| D| Incorrect. This is a characteristic of civil law; criminal law permits only one claim at a time.|  

 
PTS: 1
 
2. Which of the following is not an element of a Ponzi scheme? a.| Gaining other's confidence.|
b.| Promising abnormally high returns.|
c.| Invested money is invested in high-risk government bonds.| d.| Investment principle is partially used to make interest payments.|  
 
ANS: C
 
 | Feedback|
A| Incorrect. This is one of the most important elements of the 'con'.| B| Incorrect. This is how fraudsters lure in investors.|
C| Correct. This is very unlikely.|
D| Incorrect. The original principle is often used to make interest payments.|  
 
PTS: 1
 
3. The following are all elements of Title 26, U.S. Code Section 7201 except: a.| Not reporting bribe income may be grounds for being charged with tax evasion.| b.| Filing income tax that excludes income from fraud may be considered an improper tax filing.| c.| Bribes may be deducted as legitimate business expenses.| d.| All of the above are elements of Title 26, U.S. Code Section 7201.|  

 
ANS: C
 
 | Feedback|
A| Incorrect. Not reporting bribe income may be grounds for being charged with tax evasion.| B| Incorrect. Filing income tax that excludes income from fraud may be considered an improper tax filing.| C| Correct. Bribes cannot be deducted as legitimate business expenses.| D| Incorrect.|

 
 
PTS: 1
 
4. Which one of the following is not a characteristic of a criminal proceeding? a.| Offense against society|
b.| More guilty than not guilty|
c.| Jury of 12 individuals|
d.| Only one claim may be heard at a time|
 
 
ANS: B
 
 | Feedback|
A| Incorrect. A crime is considered as an offense against society as a whole.| B| Correct. In a criminal proceeding, the jury must find evidence "beyond a reasonable doubt." In a civil proceeding the threshold is more guilty than not guilty.| C| Incorrect. A criminal jury consists of 12 jurors.|

D| Incorrect. Only one claim is heard at a time, whereas in a civil case many claims may be joined into one action.|  
 
PTS: 1
 
5. Management fraud is typically perpetrated by:
a.| Stealing inventory|
b.| Manipulating financial statements|
c.| Overcharging for goods or services|
d.| Charging for goods not delivered|
 
 
ANS: B
 
 | Feedback|
A| Incorrect. This is relevant to employee embezzlement.| B| Correct. When management fraud takes place, executives typically manipulate the financial statements.| C| Incorrect. This is relevant to vendor fraud.|

D| Incorrect. This is relevant to customer fraud.|
 
 
PTS: 1
 
6. Which of the following is not a common classification of fraud: a.| Investment scams.|
b.| Government fraud.|
c.| Miscellaneous fraud.|
d.| Customer fraud.|
 
 
ANS: B
 
 | Feedback|
A| Incorrect. Investment scams is a general classification of fraud.| B| Correct. Though fraud associated with government agencies might be considered a serious fraud problem, it is not considered to be a classification of fraud.| C| Incorrect. Miscellaneous fraud is a general classification of fraud.| D| Incorrect. Customer fraud is a general classification of fraud.|  

 
PTS: 1
 
7. What is required to prove fraud, as...
tracking img