Who coined the term "white-collar crime" in 1939?
White-collar crime usually involves physical violence as its main method.
What makes embezzlement different from simple theft?
Insider trading can involve using material, nonpublic information to trade securities.
What is the basic mechanism of a Ponzi scheme?
A Ponzi scheme can continue indefinitely without attracting new money.
What happens during the placement stage of money laundering?
Which activity best describes layering in money laundering?
Integration is the stage when laundered money appears to come from legitimate sources.
Which organization is identified as playing a key role in investigating white-collar crimes in the United States?
White-collar crimes can cause serious financial harm even when they do not involve physical violence.
Which statement best distinguishes insider trading from embezzlement?
How did Enron use special purpose entities?
Enron's mark-to-market accounting allowed it to record projected future profits as current earnings.
What was the main purpose of Enron's special purpose entities?
Who warned Enron chairman Kenneth Lay that the accounting practices could cause the company to implode?
Enron's share price remained above $90 after the company revealed its accounting problems.
How did Madoff pay supposed returns to many earlier investors?
Madoff's investment advisory business actually carried out all the trades it claimed to make.
What weakness helped Madoff's scheme continue for many years?
Who repeatedly warned the SEC that Madoff's returns were mathematically impossible?
Madoff's scheme collapsed after many clients requested their money during the 2008 financial crisis.
What is one important lesson from the Madoff case?
Madoff received a 150-year prison sentence after pleading guilty to multiple felony counts.
Which person is correctly matched with the case in which they raised concerns internally?
What did Volkswagen's defeat device software do?
Volkswagen vehicles always used their strongest emissions controls during normal road driving.
What revealed the difference between Volkswagen's laboratory and road emissions?
Real Driving Emissions testing uses portable equipment while vehicles are driven on actual roads.
What was the main control failure in Rita Crundwell's embezzlement?
What is segregation of duties intended to do?
Crundwell's fraud was discovered while she was away from work and another employee reviewed bank statements.
What did Tyco executives use to take money from the company?
The Tyco scandal mainly involved executives using the company as a personal source of money.
How did Theranos mislead investors and the public?
Which problem made the Theranos case especially dangerous for patients?
Theranos was mainly accused of hiding ordinary company expenses through accounting entries.
Which investigative step helps build a financial crime case?
The FBI and SEC may work together during financial crime investigations.
What is continuous auditing designed to provide?
Benford's Law analysis can help identify unusual patterns in financial numbers.
What does Benford's Law analysis examine?
Which reform is associated with the Sarbanes-Oxley Act?
Sarbanes-Oxley was passed in response to major corporate scandals such as Enron and WorldCom.
What did Sarbanes-Oxley do regarding auditor independence?
Strong internal controls can help prevent one employee from controlling an entire financial process.
Which measure can help detect suspicious transactions in real time?
Employee training about fraud detection is one possible prevention measure.
Which is a possible legal consequence of white-collar crime?
A strong culture of compliance can help reduce the risk of financial misconduct.
What is the main purpose of interviewing witnesses during a financial investigation?
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