ACFE CFE- Fraud-Schemes-and-Financial-Crimes Online Access

Detailed Explanation:

Rationale for Correct Answer: Accruals represent expenses that have been incurred but not yet paid. Under the accrual basis of accounting, these must be recognized in the same period as the related revenues or obligations. Common examples include accrued wages and accrued interest.

Analysis of Incorrect Options:

B. Depreciations – Allocation of asset cost, not unpaid expenses.

C. Expenses – A broader term, but not specific to unpaid obligations.

D. Financial record – Too vague.

Key Concept: Accruals under the accrual basis of accounting.

Detailed Explanation:

Rationale for Correct Answer: One of the key red flags of fictitious revenues is sales to related parties, shell companies, or entities with unknown substance and ownership . Such transactions are often used to inflate revenue artificially.

Analysis of Incorrect Options:

A. Slow growth/unusual profitability – Incorrect, fictitious revenue often results in rapid or unrealistic growth.

B. Growth in days’ purchases in receivables – Misstated phrase; correct indicator would be growth in days’ sales in receivables .

D. Surge in purchases – Relates more to inventory fraud than fictitious revenues.

Key Concept: Red flags of fictitious revenue — questionable counterparties and unrealistic sales growth.

Shoulder surfing is the practice of obtaining personal or confidential information by watching or listening while a victim uses or discloses it. Common examples include observing someone enter a PIN, password, access code, or account number, or overhearing a person provide sensitive details during a conversation. Option A is inaccurate because impersonating a bank or financial institution to obtain confidential information is closer to phishing or vishing, not baiting. Option B is inaccurate because pharming redirects users to fraudulent websites, while searching used devices is a discarded-device or data-recovery risk. Option D describes dumpster diving, not phishing. The ACFE identity theft materials distinguish these methods because recognizing the specific technique is important for prevention, investigation, and victim response.

================

Detailed Explanation:

Rationale for Correct Answer: Tangible assets are those that can be physically perceived (touched, seen, etc.) and appraised (assigned a measurable value). Examples include buildings, land, equipment, and inventory. Both characteristics are correct, making C the best choice.

Analysis of Incorrect Options:

A. Capable of being perceived – True, but incomplete.

B. Capable of being appraised – True, but incomplete.

D. Neither A nor B – Incorrect since both statements are accurate.

Key Concept: Tangible Assets — physical and measurable property owned by a business.