Advanced Forensic Accounting Exam Questions
Course Introduction
Advanced Forensic Accounting delves into the specialized application of accounting principles and investigative techniques to uncover financial fraud, embezzlement, and other economic crimes. This course covers the collection, analysis, and preservation of financial evidence, as well as the legal and ethical responsibilities of forensic accountants. Students will explore case studies, litigation support, expert witness testimony, and the use of data analytics and digital forensics in complex financial investigations, equipping them with practical skills needed for roles in law enforcement, corporate compliance, and litigation consulting.
Recommended Textbook
Forensic Accounting and Fraud Examination 1st Edition by Mary Jo Kranacher
Available Study Resources on Quizplus
16 Chapters
916 Verified Questions
916 Flashcards
Source URL: https://quizplus.com/study-set/3573
Page 2
Chapter 1: Core Foundation Related to Fraud Examination and
Financial Forensics
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70962
Sample Questions
Q1) Practically speaking, the law generally recognizes a fiduciary duty:
A) for cashiers and accountants.
B) for ordinary employees handling cash and valuables.
C) for officers and directors of a company.
D) All of the above are recognized as having a fiduciary duty.
Answer: C
Q2) Describe the services that a forensic accountant might provide related to a marital dispute.
Answer: Forensic accountants may assist attorneys with assembling the financial information necessary to either bolster if hired by the plaintiff or undercut if hired by the defendant a case. This may include, for example, locating hidden marital assets or income, calculating the present value of future cash flow from retirement plans and providing testimony in the case.
Q3) One of the best ways to ruin an investigation, fail to gain a conviction, or lose a civil case is to base investigative conclusions on logic and conjecture.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Careers in Fraud Examination and Financial
Forensics
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/70961
Sample Questions
Q1) In February 2005, the American Institute of Certified Public Accountants AICPA issued a report titled "Management Override of Internal Controls: The Achilles' Heel of Fraud Prevention." It notes that management may override internal controls and engage in financial statement fraud by all of the following except:
A) channel stuffing.
B) recording fictitious business transactions and events or altering the timing of recognition of legitimate transactions.
C) recording and reversing biased reserves through unjustifiable estimates and judgments.
D) changing the records and terms of significant or unusual transactions.
Answer: A
Q2) One of the most important contributions of criminology to the study of fraud is:
A) the M.I.C.E. concept.
B) the fraud triangle.
C) the relationship of punishment to remediation.
D) Another choice is the most important contribution of criminology.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Who Commits Fraud and Why: Criminology and Ethics
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70960
Sample Questions
Q1) Organizational crimes occur when entities, companies, corporations, not-for-profits, nonprofits, and government bodies, otherwise legitimate and law-abiding organizations, are involved in a criminal offense.
A)True
B)False
Answer: True
Q2) Select the most correct statement from those below regarding the legal standards for negligence.
A) Breach-a determination that the defendant failed to use ordinary or reasonable care in the exercise of that duty.
B) Reasonableness-a determination that the defendant failed to use ordinary or reasonable care in the exercise of that duty.
C) Breach-an actual connection between the defendant's breach of duty and the plaintiff's harm can be established
D) Cause in Fact - the defendant must have been the proximate cause or contributed to the injury to the plaintiff.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Complex Frauds and Financial Crimes
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/70959
Sample Questions
Q1) Off shore banks:
A) Are illegal to do business with if you are a US citizen
B) Are used by US high net worth individuals for favorable tax treatment
C) Often are subsidiaries of US banks
D) All of the above
Q2) "Following the money" is easier than "tracing the money".
A)True
B)False
Q3) The difference between a predator fraudster and an accidental one is:
A)The accidental fraudster does not seek opportunity, the predator does
B) The predator fraudster is a repeat offender; the accidental fraudster is not
C) The accidental fraudster is in need of funds; the predator fraudster is not
D) Both "a" and "b"
Q4) "Accidental" fraudsters are usually poor members of minority groups.
A)True
B)False
Q5) "Organizations" refers to unions, the mafia, as well as corporations.
A)True
B)False
Q6) Describe the stages of money laundering and for each stage, provide an example.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Cybercrime: Computer and Internet Fraud
Available Study Resources on Quizplus for this Chatper
6 Verified Questions
6 Flashcards
Source URL: https://quizplus.com/quiz/70958
Sample Questions
Q1) An employee, having authorized access to a work computer, commits fraud while using the computer. This is an example of a computer crime.
A)True
B)False
Q2) Computer crime and computer fraud are synonyms.
A)True
B)False
Q3) Computer crime involves the attempt to access data illegally.
A)True
B)False
Q4) Cyber-crime involves the use of cell phones.
A)True
B)False
Q5) Computers offer cyber criminals efficient ways to hide fraudulent activities.
A)True
B)False
Q6) The "computer as a symbol" involves using a computer to intercept data transmission.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Legal, Regulatory, and Professional Environment
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/70957
Sample Questions
Q1) If the victims or others with a stake in the outcome of a fraud trial are not satisfied with the results of the criminal justice system, they may pursue their claim through the civil justice system.
A)True
B)False
Q2) What are the factors that affect the decision to prosecute an entity?
Q3) The Sarbanes-Oxley Act mandates that each member of a company's audit committee must be a member of its board of directors and must otherwise be independent.
A)True
B)False
Q4) Section 404 of SOX recommends, but does not require, the company's external auditors to attest to and issue a report on management's assessment of internal control. A)True
B)False
Q5) What common law protections do individuals have during interviews?
Q6) What remedies are available through the civil and criminal justice systems?
Q7) What approaches are used by investigators to obtain documents?
Q8) In the criminal justice system, how is probation different from parole?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Fraud Detection: Red Flags and Targeted Risk Assessment
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70956
Sample Questions
Q1) The public perception of independent auditors, particularly with regard to asset misappropriation, corruption, and misstated financial statements, is that:
A) independent auditors have overcome the "expectations gap."
B) an independent auditor's responsibility is to provide reasonable assurance that the financial statements are free from material misstatement whether by error or fraud.
C) independent auditors are responsible for fraud detection.
D) audited financial statements are free of estimates and misstatements.
Q2) An auditor's opinion of:
A) "unqualified" indicates that there are major problems with the financial statements presented by management.
B) "unqualified" indicates that the independent auditors believe the financial statements presented by management are fairly presented.
C) "qualified" indicates that the independent auditors believe the financial statements presented by management meet the guidance of U.S. GAAP.
D) All of the choices are correct..
Q3) Generally, how is the problem of management override and collusion addressed?
Q4) What is the role of the external auditor in the financial reporting process?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Detection and Investigations
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/70955
Sample Questions
Q1) Hidden assets can be found through:
A) A lifestyle audit
B) Examination of property records
C) Examination of spending habits
D) All of the above
Q2) Pressure is a form of motive.
A)True
B)False
Q3) An interview that is conducted in order to obtain a confession is called:
A) A confession
B) An interrogation
C) Cross-examination
D) None of the above
Q4) Katie Cutie transfers assets to a living trust. This is a method of hiding assets.
A)True
B)False
Q5) Lifestyle audits, conducted by the IRS, are a means of determining tax evasion.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Effective Interviewing and Interrogation
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/70954
Sample Questions
Q1) ________ questions contain the answer as a part of the question.
A) Open
B) Closed
C) Affirmative
D) Leading
Q2) General rules for conduction an introductory interview for potential suspects include all EXCEPT:
A) Discussing the source of the allegations
B) Seeking continuous agreement
C) Ask non-sensitive questions
D) Conduct the interview under conditions of privacy
Q3) The general law of confessions requires that they be completely voluntary.
A)True
B)False
Q4) Non-verbal cues for deception include all EXCEPT:
A) Calmness
B) Hands over the mouth
C) Crossing the arms
D) Fleeing positions
Q5) What are some of the reasons that persons often fail to identify lies?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Using Information Technology for Fraud
Examination and Financial Forensics
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/70953
Sample Questions
Q1) Record validation can include reasonableness checks, sequences checks, and other checks.
A)True
B)False
Q2) The general framework for viewing IT risks and controls include all the following EXCEPT
A) IT Operations
B) Systems Maintenance
C) Human Resource Management
D) Electric Commerce
Q3) Preparing link charts is a way to represent the associations, linkages, and other important relationship graphically.
A)True
B)False
Q4) There are two major ways to test IT systems - the "black-box" approach, and the "white-box" approach, which utilizes a relatively small dataset to test the system.
A)True
B)False
Page 12
Q5) What are the two categories of data mining and knowledge discovery software?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Cash Receipt Schemes and Other Asset
Misappropriations
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/70952
Sample Questions
Q1) List three proactive computer audit steps for detecting skimming from page 304306.
Q2) What computer audit steps could catch a scheme in which inventory is shipped directly to an employee address?
A) List top ten employees by sales adjustments
B) Join an employee home address file to a shipment address file
C) List tope tem employees in respect to asset transfers
D) Summarize user access to the sales file
Q3) When an employee skims money off-book sales of merchandise, the theft can be detected by comparing the register tape to the cash drawer.
A)True
B)False
Q4) "Death by a thousand cuts" involves stealing cash one thousand dollars at a time. A)True B)False
Q5) Software like IDEA and ACL is generally not suitable to detect skimming of cash. A)True B)False
13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Cash Disbursement Schemes
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/70951
Sample Questions
Q1) In order for a "pay and return" scheme to work, vendors must be an accomplice.
A)True
B)False
Q2) Pay and return schemes depend on which of the following controls being absent:
A) Separation of duties between the payment requestor and the mailroom
B) Separation of duties between the mailroom and cash receipts
C) Separation of duties between the vendor and the payment requestor
D) None of the above
Q3) "Rubberstamping," in shell company situations means that a rubber stamp is used for signatory purposes.
A)True
B)False
Q4) One way of diverting revenue for personal gain is to make fictitious sales to accomplices using bogus credit cards and "splitting the difference".
A)True
B)False
Q5) Fraudulent disbursements are commonly made to a fictitious payee.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Corruption and the Human Factor
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/70950
Sample Questions
Q1) List the four major corruption schemes.
Q2) What is the difference between fraud prevention and fraud deterrence?
Q3) Perhaps the most common indicator of collusive bidding practices is an unusually low contract price.
A)True
B)False
Q4) Why is it problematic for an organization to set standards that are too high?
Q5) What is a fail safe way to eliminate fraud in the workplace?
A) Pay people competitive salaries
B) Mandate annual financial disclosure for all employees
C) Strong internal controls
D) Eliminate people
Q6) Which of the following would not normally be considered an illegal gratuity to the purchasing manager of Company A?
A) Accepting a trip to Hawaii donated by the vendor
B) Accepting of vendor office calendars
C) World Series baseball tickets donated by the vendor
D) Super Bowl tickets donated by the vendor
Q7) What types of abuses may occur at the pre-solicitation stage of the bidding process?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Financial Statement Fraud
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/70949
Sample Questions
Q1) This Periodicity assumption uses the principle of dividing economic activity into specific time intervals, such as monthly, quarterly, and annually as well as a five year time period.
A)True
B)False
Q2) What is the conceptual framework for financial reporting?
Q3) The matching concept recommends but does not require that the books and records and the resultant financial statements match revenue and expense in the proper accounting period.
A)True
B)False
Q4) List four red flags associated with improper disclosure.
Q5) According to generally accepted accounting principles, the cash basis of accounting should be used for financial reporting
A)True
B)False
Q6) What are the four classifications of financial statement fraud?
Q7) Why might senior management overstate or understate business performance?
Q8) How may improper asset valuation inflate the current ratio?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Consulting, Litigation Support, and Expert
Witnesses: Damages, Valuations, and Other Engagements
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/70948
Sample Questions
Q1) How may lost profits be calculated using typical benchmarks?
Q2) Torts occur when a party has been injured, even though the parties to the suit do not have a contractual relationship.
A)True
B)False
Q3) The amount of loss in commercial damages may be affected by all EXCEPT:
A) The general economy
B) The conditions of the industry
C) The damages entity's completive environment
D) Compliance with GAAP
Q4) Interviews are normally conducted under oath, so they carry the same weight as testimony and are invaluable tools used by the fraud examiner and forensic accountant for gathering information.
A)True
B)False
Q5) What are the considerations related to forecasting income and cash flows?
Q6) Generally, all employment benefits are lost when an injury or permanent disability occurs.
A)True
B)False Page 17
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 16: Remediation and Litigation Advisory Services
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/70947
Sample Questions
Q1) The Frye Rule makes an opinion inadmissible even if that opinion has general acceptance in the scientific community.
A)True
B)False
Q2) How does the legal system differentiate between "following" versus "tracing' the money?
Q3) During the investigation, the anti-fraud professional or forensic accountant has likely developed a number of presentation tools and analyses with the exception of:
A) Regression analyses
B) Link charts
C) The Evidence/Hypothesis Matrix
D) Timelines
Q4) A company should develop a system of internal controls that provides absolute assurance that assets are protected and financial statements are fairly presented.
A)True
B)False
Q5) What is a deposition and why is it used?
Q6) What is the difference between fact witnesses and expert witnesses?
To view all questions and flashcards with answers, click on the resource link above. Page 19