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1. Cynthia is approached by Jane, a friend a. Cynthia is asked to provide her financial status
from church, about joining her in a new and current salary.
private investment opportunity. Cynthia b. Cynthia is warned about the risks of investing
agrees to meet with Jane and Bradley, the and not guaranteed a particular percentage
representative for the investment, to learn of return.
more. Which of the following should serve as a c. Cynthia is asked if she wants to reinvest or roll
red flag to Cynthia that this opportunity might over her profits.
be an investment scheme? d. Cynthia is informed that many other church
friends of hers and Jane’s have invested as well.
About the
authors
2. When a new cryptocurrency emerges through a. Do not invest if you do not understand how the Laura Harris is a
an initial coin offering (ICO), potential opportunity operates. research specialist
scammers are often waiting to take advantage b. Invest or trade based only on the advice of those for the Association
of those who want to make money on the who have already had success. of Certified Fraud
latest digital opportunity but might not be c. Invest in a coin that trades exclusively on its Examiners (ACFE),
fully educated on how the technology works. own exchange. where she focuses
Which of the following practices can help d. Do not invest if the currency’s white paper is on writing about
someone invest legitimately and reduce the available to everyone. and researching
risks of investing in cryptocurrency? accounting fraud.
Andi McNeal, CPA,
CFE, is director
of research for
3. A celebrity posts on his social media about a. Churning. the ACFE, where
his favorite new cryptocurrency. The b. Bait and switch. she oversees the
endorsement encourages followers to buy c. Pump and dump. development
into the same investment. Not long after the d. Investment coaching. and production
surge of purchasing, the celebrity sells his of educational
investment. The value plummets soon after. materials related
What type of scam is this? to the prevention,
detection, and
investigation of
fraud.
4. Betty constantly checks the mailbox. One a. Betty should wait for the next statement to
day, her neighbor, Mary, asks her if she is confirm the suspicions.
expecting something specific. Betty informs b. Betty should contact her nephew.
Mary that she is waiting on her investment c. Betty should report her discovery to the ap-
statement from her nephew’s firm. She hasn’t propriate authority.
received her dividends or statements for over d. Betty should contact the local news.
six months. Betty hasn’t called her nephew
because she knows he is busy. After offering
to help Betty, Mary looks at previous account
statements and researches the investment
firm, only to find no trace of Betty’s nephew
or the firm’s phone number or address. Mary To comment on this
informs Betty that she suspects Betty has been article or to suggest
a victim of a Ponzi scheme. What should Betty an idea for another
do with this information? article, contact
Courtney Vien at
Courtney.Vien@
aicpa-cima.com or
919-402-4125.

journalofaccountancy.com May 2022 | 13