Forensic Accounting Exam 1 Chapters 1-6
Updated Actual Questions and CORRECT
Answers
As consultants, which of the following services do forensic accountants not provide?
a. Advice on fraud risk mitigation.
b. Valuation of an estate.
c. Opining on the fair presentation of financial statements.
d. Financial impact of mergers and acquisitions. - CORRECT ANSWER Opining on
the fair presentation of financial statements.
When performing dispute resolution services, forensic accountants can serve as ______ or
_______.
a. Facilitators; advocators.
b. Mediators; arbitrators.
c. Judge; jury.
d. None of the above. - CORRECT ANSWER Mediators; arbitrators
Internal fraud schemes typically involve weaknesses in ________.
a. Accounting.
b. Internal controls.
c. Leadership.
d. Assessment. - CORRECT ANSWER Internal controls
Having knowledge in which of the following areas is important for a forensic accountant?
a. Information technology.
b. Psychology.
c. Criminology.
,d. All of the above - CORRECT ANSWER All of the above
The use of expert witnesses is primarily to do which of the following?
a. Settle disputes out-of-court.
b. Assist the trier of fact.
c. Be an advocate for the defendant or plaintiff.
d. Fulfill the court's obligation of due diligence. - CORRECT ANSWER Assist the trier
of fact.
According to professional standards, forensic accountants are engaged only to assist lawyers
as they prepare for litigation.
a. True.
b. False. - CORRECT ANSWER False
To work effectively, a forensic accountant should have a basic understanding of all of the
following except:
a. Rules of evidence.
b. Law applicable to conspiracy crimes.
c. Court systems.
d. Enharmonic equivalents. - CORRECT ANSWER Enharmonic equivalents
Whereas traditional accounting has many subspecialties such as cost accounting, forensic
accounting has relatively few sub-specialties.
a. True.
b. False. - CORRECT ANSWER False
Auditors and forensic accountants are similar in that they both______.
a. Use the auditing standards issued by the AICPA to guide their work.
b. Are required to be independent of their clients.
c. Are allowed to formulate opinions to assist their clients and others.
,d. Must be licensed to practice by the states in which they practice. - CORRECT
ANSWER Are allowed to formulate opinions to assist their clients and others.
What are the key elements of the definition of forensic accounting? - CORRECT
ANSWER Accounting, special skills, law, evidential matter, interpretation and
communication
What does the word forensic mean? - CORRECT ANSWER Pertaining to law
What are the two areas into which the practice of forensic accounting is typically divided? -
CORRECT ANSWER Litigation and investigative services
How does auditing differ from forensic accounting? - CORRECT ANSWER While
both examine evidence and form professional judgements on what they observe, auditors
express opinions on financial statements as a whole and forensic accountants focus on one or
more particular areas.
By whom and when was the term forensic accounting coined? - CORRECT
ANSWER Maurice Peloubet coined the term in 1946 by publishing the article
"Forensic Accounting - Its Place in Today's Economy"
What are some of the knowledge and skills required in forensic accounting? - CORRECT
ANSWER Auditing, Criminal and Digital Forensics, Accounting Information systems,
Risk analysis, communication, psychology, information technology, problem solving, legal.
What special skills and knowledge are required to conduct forensic accounting
investigations? - CORRECT ANSWER Understanding of how to structure and manage
an investigation.
Know the types of evidence that may be collected.
How to maintain the chain of custody .
Know the legal rights of those under investigation.
Know how to identify different types of fraud schemes.
Know how to conduct interviews.
, Know how to detect deception.
What are two areas in which forensic accountants, as expert consultants, can give advice? -
CORRECT ANSWER The value of an estate, internal dispute resolution systems.
What is the difference between fact witnesses and expert witnesses? - CORRECT
ANSWER Fact witnesses are only able to testify to what they perceive personally
through their sense while expert witnesses are allowed to give opinions on relevant issues
before the trier of fact.
What are the three management activities associated with fraud risk management? -
CORRECT ANSWER Identify fraud risk
Prevent fraud schemes
Detect fraud schemes
Name three organizations that are applicable to forensic accountants and discuss which
factors play a role in determining the organizations to which forensic accountants belong. -
CORRECT ANSWER The factors that determine the organization are education,
training, experience, and areas of professional focus.
American Society of Appraisers (ASA)
Association of Certified Fraud Examiners (ACFE)
Association of Internal Certified Professional Accountants (AICPA)- CFF, ABV
Identify and describe four credentials that are specific to the forensic practice of valuation. -
CORRECT ANSWER NACVA - National Association of Certified Valuators and
Analysts who value business, damage determinations, and fraud detection and prevention.
CVA - Certified Valuation Analyst
AVA - Accredited Valuation Analyst
ABAR - Accredited in Business Appraisal Review
MAFF - Master Analyst in Financial Forensics
Updated Actual Questions and CORRECT
Answers
As consultants, which of the following services do forensic accountants not provide?
a. Advice on fraud risk mitigation.
b. Valuation of an estate.
c. Opining on the fair presentation of financial statements.
d. Financial impact of mergers and acquisitions. - CORRECT ANSWER Opining on
the fair presentation of financial statements.
When performing dispute resolution services, forensic accountants can serve as ______ or
_______.
a. Facilitators; advocators.
b. Mediators; arbitrators.
c. Judge; jury.
d. None of the above. - CORRECT ANSWER Mediators; arbitrators
Internal fraud schemes typically involve weaknesses in ________.
a. Accounting.
b. Internal controls.
c. Leadership.
d. Assessment. - CORRECT ANSWER Internal controls
Having knowledge in which of the following areas is important for a forensic accountant?
a. Information technology.
b. Psychology.
c. Criminology.
,d. All of the above - CORRECT ANSWER All of the above
The use of expert witnesses is primarily to do which of the following?
a. Settle disputes out-of-court.
b. Assist the trier of fact.
c. Be an advocate for the defendant or plaintiff.
d. Fulfill the court's obligation of due diligence. - CORRECT ANSWER Assist the trier
of fact.
According to professional standards, forensic accountants are engaged only to assist lawyers
as they prepare for litigation.
a. True.
b. False. - CORRECT ANSWER False
To work effectively, a forensic accountant should have a basic understanding of all of the
following except:
a. Rules of evidence.
b. Law applicable to conspiracy crimes.
c. Court systems.
d. Enharmonic equivalents. - CORRECT ANSWER Enharmonic equivalents
Whereas traditional accounting has many subspecialties such as cost accounting, forensic
accounting has relatively few sub-specialties.
a. True.
b. False. - CORRECT ANSWER False
Auditors and forensic accountants are similar in that they both______.
a. Use the auditing standards issued by the AICPA to guide their work.
b. Are required to be independent of their clients.
c. Are allowed to formulate opinions to assist their clients and others.
,d. Must be licensed to practice by the states in which they practice. - CORRECT
ANSWER Are allowed to formulate opinions to assist their clients and others.
What are the key elements of the definition of forensic accounting? - CORRECT
ANSWER Accounting, special skills, law, evidential matter, interpretation and
communication
What does the word forensic mean? - CORRECT ANSWER Pertaining to law
What are the two areas into which the practice of forensic accounting is typically divided? -
CORRECT ANSWER Litigation and investigative services
How does auditing differ from forensic accounting? - CORRECT ANSWER While
both examine evidence and form professional judgements on what they observe, auditors
express opinions on financial statements as a whole and forensic accountants focus on one or
more particular areas.
By whom and when was the term forensic accounting coined? - CORRECT
ANSWER Maurice Peloubet coined the term in 1946 by publishing the article
"Forensic Accounting - Its Place in Today's Economy"
What are some of the knowledge and skills required in forensic accounting? - CORRECT
ANSWER Auditing, Criminal and Digital Forensics, Accounting Information systems,
Risk analysis, communication, psychology, information technology, problem solving, legal.
What special skills and knowledge are required to conduct forensic accounting
investigations? - CORRECT ANSWER Understanding of how to structure and manage
an investigation.
Know the types of evidence that may be collected.
How to maintain the chain of custody .
Know the legal rights of those under investigation.
Know how to identify different types of fraud schemes.
Know how to conduct interviews.
, Know how to detect deception.
What are two areas in which forensic accountants, as expert consultants, can give advice? -
CORRECT ANSWER The value of an estate, internal dispute resolution systems.
What is the difference between fact witnesses and expert witnesses? - CORRECT
ANSWER Fact witnesses are only able to testify to what they perceive personally
through their sense while expert witnesses are allowed to give opinions on relevant issues
before the trier of fact.
What are the three management activities associated with fraud risk management? -
CORRECT ANSWER Identify fraud risk
Prevent fraud schemes
Detect fraud schemes
Name three organizations that are applicable to forensic accountants and discuss which
factors play a role in determining the organizations to which forensic accountants belong. -
CORRECT ANSWER The factors that determine the organization are education,
training, experience, and areas of professional focus.
American Society of Appraisers (ASA)
Association of Certified Fraud Examiners (ACFE)
Association of Internal Certified Professional Accountants (AICPA)- CFF, ABV
Identify and describe four credentials that are specific to the forensic practice of valuation. -
CORRECT ANSWER NACVA - National Association of Certified Valuators and
Analysts who value business, damage determinations, and fraud detection and prevention.
CVA - Certified Valuation Analyst
AVA - Accredited Valuation Analyst
ABAR - Accredited in Business Appraisal Review
MAFF - Master Analyst in Financial Forensics
