Chapter 01
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. Forensic Accounting is defined as:
a. The practice of applying defined financial ratios to investigate a company’s financial
health.
b. The use of law enforcement to subpoena financial records to determine unlawful actions.
C. The application of investigative and analytical skills for the purpose of resolving financial
issues in a manner that meets standards required by courts of law.
d. The investigatory arm of the Securities and Exchange Commission.
Difficulty: Easy
2. If your actions are the result of misleading, intentional actions or inaction (including
misleading statements and the omission of relevant information) to gain an advantage, then
you have committed:
a. Perjury.
b. Contempt.
c. Treason.
D. Fraud.
Difficulty: Moderate
,3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
,4. Which of the following two are types of auditors?
A. External and Internal
b. Internal and Forensic
c. Forensic and International
d. External and Forensic
Difficulty: Easy
5. Forensic accounting can be broken into how many categories?
A. Two: Investigative and Litigation.
b. Two: Internal and External.
c. Three: Investigative, External, Preventative.
d. Three: Internal, Litigation, Certified.
Difficulty: Moderate
6. What is one of the primary differences between a Financial Statement auditor and a
Forensic Accountant?
a. Financial statement auditors are likely to follow leads suggested by immaterial items
whereas Forensic Accountants often must restrict their efforts to searching for material
misstatements.
B. Forensic Accountants are likely to follow leads suggested by immaterial items whereas
financial statement auditors often must restrict their efforts to searching for material
misstatements.
c. Forensic Accountants must focus on specific legal areas that produce fraud charges under
the courts of law whereas financial statement auditors focus their attention on the
Generally Accepted Accounting Principles.
d. Forensic Accountants are likely to ask individuals to fix discrepancies found in financial
statements whereas financial statement auditors will fail a corporations financial statement
certification, therefore having repercussions with the SEC.
Difficulty: Hard
,
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. Forensic Accounting is defined as:
a. The practice of applying defined financial ratios to investigate a company’s financial
health.
b. The use of law enforcement to subpoena financial records to determine unlawful actions.
C. The application of investigative and analytical skills for the purpose of resolving financial
issues in a manner that meets standards required by courts of law.
d. The investigatory arm of the Securities and Exchange Commission.
Difficulty: Easy
2. If your actions are the result of misleading, intentional actions or inaction (including
misleading statements and the omission of relevant information) to gain an advantage, then
you have committed:
a. Perjury.
b. Contempt.
c. Treason.
D. Fraud.
Difficulty: Moderate
,3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
,4. Which of the following two are types of auditors?
A. External and Internal
b. Internal and Forensic
c. Forensic and International
d. External and Forensic
Difficulty: Easy
5. Forensic accounting can be broken into how many categories?
A. Two: Investigative and Litigation.
b. Two: Internal and External.
c. Three: Investigative, External, Preventative.
d. Three: Internal, Litigation, Certified.
Difficulty: Moderate
6. What is one of the primary differences between a Financial Statement auditor and a
Forensic Accountant?
a. Financial statement auditors are likely to follow leads suggested by immaterial items
whereas Forensic Accountants often must restrict their efforts to searching for material
misstatements.
B. Forensic Accountants are likely to follow leads suggested by immaterial items whereas
financial statement auditors often must restrict their efforts to searching for material
misstatements.
c. Forensic Accountants must focus on specific legal areas that produce fraud charges under
the courts of law whereas financial statement auditors focus their attention on the
Generally Accepted Accounting Principles.
d. Forensic Accountants are likely to ask individuals to fix discrepancies found in financial
statements whereas financial statement auditors will fail a corporations financial statement
certification, therefore having repercussions with the SEC.
Difficulty: Hard
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