Test Bank
For Forensic
Accounting And
Fraud
Examination,
3rd Edition By
Richard Riley,
Mary-Jo
Kranacher
,Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
CHAPTER 1
Module 1
1. Which Of The Following Is NOT One Of The Four Essential Elements Of Fraud Under
Common Law?
A. A Material False Statement
B. Reliance On The False Statement By The Victim
C. Knowledge That The Statement Was False When It Was Spoken
D. Use Of Email, Wire, Or Telephone With A Criminal Intent To Deceive
2. The “Felonious Stealing, Taking And Carrying, Leading, Riding, Or Driving Away
With Another’s Property, With The Intent To Convert It Or Deprive The Owner
Thereof” Is The Legal Definition Of:
A. Embezzlement
B. Tort
C. Larceny
D. Fraud
3. A Fiduciary Is Someone Who:
A. Swears An Oath Before Taking Office
B. Acts For The Benefit Of Another
C. Betrays The Trust Of Another
D. Controls Access To An Organization’s Cash Or Assets
4. An Unauthorized Assumption And Exercise Of The Right Of Ownership Over Goods Or
Personal Chattels Belonging To Another, To The Alteration Of Their Condition Or The
Exclusion Of The Owner’s Rights Is The Definition Of:
A. Collusion
B. Concealment
C. Capital Misappropriation
D. Conversion
5. The Intentional, Deliberate Misstatement, Or Omission Of Material Facts Or Accounting
Data That Is Misleading And, When Considered With All The Information Made
Available, That Would Cause The Reader To Change Or Alter His Or Her Judgment Or
Decision Is Defined By The Association Of Certified Fraud Examiners As:
A. Financial Statement Fraud
B. Financial Statement Misstatement
C. Financial Statement Concealment
D. Financial Statement Re-Statement
1 of 11
,Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
6. Which Of The Following Is An Example Of Financial Statement And Reporting Fraud?
A. Failing To Post Audit Results On The Company’s Website
B. Debt Ratio Is Materially Higher Than Industry Standards
C. Improper Timing Of Revenue And Expense Recognition
D. Net Income For Any Quarterly Filing Is 17% Or More Below Analyst Predictions
7. The Essential Characteristics Of Financial Statement Fraud Are:
A. The Misstatement Is Material And Intentional And The Users Of The
Financial Statements Are Investors In Publicly Traded Companies.
B. This Misstatement Is Material And Intentional And The Preparers Of The
Financial Statements Have A Fiduciary Obligation To The Organization.
C. The Misstatement Is Material And Intentional And The Preparers Of The
Financial Statements Fail To Report The Misstatement To The SEC Or Other
Applicable Authority.
D. The Misstatement Is Material And Intentional And The Users Of The
Financial Statements Have Been Misled.
8. As A Result Of The Sarbanes-Oxley Act (2002), Which Of The Following Became Part
Of The Business Landscape?
A. Assessment Of Internal Controls, Preservation Of Evidence, Whistleblower
Protection And Increased Penalties For Securities Fraud
B. Mandatory Separation Of Duties, Two-Factor Authentication For Online
Transactions, And Prohibition Of Fraudulent Financial Reporting
C. Mandatory Quarterly Reporting Of Shell Company Beneficial Ownership,
Mandatory Criminal Background Checks On All Publicly Traded Company
Officers And Directors, And Annual Review Of Internal Controls By The SEC
D. Auditing Firm Competence Certification, Annual Disclosure Of Conflicts Of
Interest By The Board Of Directors, Prohibition Of Illegal Gratuities And Penalties
For Whistleblowers
9. The Occupational Fraud And Abuse Classification System (Fraud Tree)
Arranges Organizational Frauds In Which Three Categories?
A. The Act, Concealment, And Conversion
B. Existence Of A Fiduciary Relationship, Breach Of Duty, Harm To The Plaintiff Or
Benefit To The Fiduciary
C. Asset Misappropriation, Corruption, And Financial Statement Fraud
D. Incentive, Opportunity, And Rationalization.
10. Internal Fraud Committed By One Or More Employees Of An Organization Is More
Commonly Referred To As:
A. Fiduciary Breach And Embezzlement
B. Insider Trading And Market Timing
2 of 11
, Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
C. Occupational Fraud And Abuse
D. Check Tampering And Billing Schemes
11. The Approach To Investigating Fraud Recommended By The Text:
A. Identify The Specific Law That Was Violated
B. Examine Relevant Evidence With An Eye Toward Demonstrating Three
Attributes Of Fraud
C. Defer Decisions That Are Suited To An Attorney’s Expertise
D. Provide Reasonable Evidence In Support Of Any Opinion Of Guilt
12. The Three Attributes Of A Fraud Are:
A. The Scheme Or Fraud Act, The Concealment Activity, And The Conversion Or
Benefit.
B. The Motive, Rationalization And Opportunity.
C. The Intent, The Planning, And The Execution Of A Fraudulent Act.
D. Asset Misappropriations, Corruption, And Financial Statement Fraud And
Other Fraudulent Statements.
13. Who Said, “White Collar Criminals Consider Your Humanity As A Weakness To Be
Exploited
…”?
A. Dr. Joseph T. Wells
B. Sherron Watkins
C. Sam E. Antar
D. Andrew Fastow
Module 2
14. Forensic Accounting Is The Application Of Financial Principles And Theories To
Facts Or Hypotheses In A Legal Dispute And Consists Of Two Primary Functions:
A. Litigation Advisory Services And Investigative Services
B. Expressing An Opinion Of Guilt Or Innocence In Court Regarding Audit
Results And Documenting The Steps Taken To Reach That Opinion
C. Subjecting Accounting Data To A Benford Analysis And Explaining The
Results To A Judge Or Jury
D. Providing Courtroom Testimony And Administrative Technical Guidance To
Attorneys
15. Forensic And Valuation Services (FVS) Professionals Can Expect That:
A. Their Opinion Will Be Carefully Noted In Court.
B. The Attorney For Opposing Counsel To Defer To The FVS Professional’s Expert
Opinion On Matters Pertaining To Forensic Accounting.
C. Their Work Will Be Carefully Scrutinized By The Opposing Side And That
3 of 11
For Forensic
Accounting And
Fraud
Examination,
3rd Edition By
Richard Riley,
Mary-Jo
Kranacher
,Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
CHAPTER 1
Module 1
1. Which Of The Following Is NOT One Of The Four Essential Elements Of Fraud Under
Common Law?
A. A Material False Statement
B. Reliance On The False Statement By The Victim
C. Knowledge That The Statement Was False When It Was Spoken
D. Use Of Email, Wire, Or Telephone With A Criminal Intent To Deceive
2. The “Felonious Stealing, Taking And Carrying, Leading, Riding, Or Driving Away
With Another’s Property, With The Intent To Convert It Or Deprive The Owner
Thereof” Is The Legal Definition Of:
A. Embezzlement
B. Tort
C. Larceny
D. Fraud
3. A Fiduciary Is Someone Who:
A. Swears An Oath Before Taking Office
B. Acts For The Benefit Of Another
C. Betrays The Trust Of Another
D. Controls Access To An Organization’s Cash Or Assets
4. An Unauthorized Assumption And Exercise Of The Right Of Ownership Over Goods Or
Personal Chattels Belonging To Another, To The Alteration Of Their Condition Or The
Exclusion Of The Owner’s Rights Is The Definition Of:
A. Collusion
B. Concealment
C. Capital Misappropriation
D. Conversion
5. The Intentional, Deliberate Misstatement, Or Omission Of Material Facts Or Accounting
Data That Is Misleading And, When Considered With All The Information Made
Available, That Would Cause The Reader To Change Or Alter His Or Her Judgment Or
Decision Is Defined By The Association Of Certified Fraud Examiners As:
A. Financial Statement Fraud
B. Financial Statement Misstatement
C. Financial Statement Concealment
D. Financial Statement Re-Statement
1 of 11
,Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
6. Which Of The Following Is An Example Of Financial Statement And Reporting Fraud?
A. Failing To Post Audit Results On The Company’s Website
B. Debt Ratio Is Materially Higher Than Industry Standards
C. Improper Timing Of Revenue And Expense Recognition
D. Net Income For Any Quarterly Filing Is 17% Or More Below Analyst Predictions
7. The Essential Characteristics Of Financial Statement Fraud Are:
A. The Misstatement Is Material And Intentional And The Users Of The
Financial Statements Are Investors In Publicly Traded Companies.
B. This Misstatement Is Material And Intentional And The Preparers Of The
Financial Statements Have A Fiduciary Obligation To The Organization.
C. The Misstatement Is Material And Intentional And The Preparers Of The
Financial Statements Fail To Report The Misstatement To The SEC Or Other
Applicable Authority.
D. The Misstatement Is Material And Intentional And The Users Of The
Financial Statements Have Been Misled.
8. As A Result Of The Sarbanes-Oxley Act (2002), Which Of The Following Became Part
Of The Business Landscape?
A. Assessment Of Internal Controls, Preservation Of Evidence, Whistleblower
Protection And Increased Penalties For Securities Fraud
B. Mandatory Separation Of Duties, Two-Factor Authentication For Online
Transactions, And Prohibition Of Fraudulent Financial Reporting
C. Mandatory Quarterly Reporting Of Shell Company Beneficial Ownership,
Mandatory Criminal Background Checks On All Publicly Traded Company
Officers And Directors, And Annual Review Of Internal Controls By The SEC
D. Auditing Firm Competence Certification, Annual Disclosure Of Conflicts Of
Interest By The Board Of Directors, Prohibition Of Illegal Gratuities And Penalties
For Whistleblowers
9. The Occupational Fraud And Abuse Classification System (Fraud Tree)
Arranges Organizational Frauds In Which Three Categories?
A. The Act, Concealment, And Conversion
B. Existence Of A Fiduciary Relationship, Breach Of Duty, Harm To The Plaintiff Or
Benefit To The Fiduciary
C. Asset Misappropriation, Corruption, And Financial Statement Fraud
D. Incentive, Opportunity, And Rationalization.
10. Internal Fraud Committed By One Or More Employees Of An Organization Is More
Commonly Referred To As:
A. Fiduciary Breach And Embezzlement
B. Insider Trading And Market Timing
2 of 11
, Test bank project for Forensic Accounting and Fraud Examination (2nd Ed.) by Mary-Jo Kranacher and Dick Riley
Test bank written by Brian L. Carpenter, PhD, CFE ∙ (989) 205-4182 ∙
C. Occupational Fraud And Abuse
D. Check Tampering And Billing Schemes
11. The Approach To Investigating Fraud Recommended By The Text:
A. Identify The Specific Law That Was Violated
B. Examine Relevant Evidence With An Eye Toward Demonstrating Three
Attributes Of Fraud
C. Defer Decisions That Are Suited To An Attorney’s Expertise
D. Provide Reasonable Evidence In Support Of Any Opinion Of Guilt
12. The Three Attributes Of A Fraud Are:
A. The Scheme Or Fraud Act, The Concealment Activity, And The Conversion Or
Benefit.
B. The Motive, Rationalization And Opportunity.
C. The Intent, The Planning, And The Execution Of A Fraudulent Act.
D. Asset Misappropriations, Corruption, And Financial Statement Fraud And
Other Fraudulent Statements.
13. Who Said, “White Collar Criminals Consider Your Humanity As A Weakness To Be
Exploited
…”?
A. Dr. Joseph T. Wells
B. Sherron Watkins
C. Sam E. Antar
D. Andrew Fastow
Module 2
14. Forensic Accounting Is The Application Of Financial Principles And Theories To
Facts Or Hypotheses In A Legal Dispute And Consists Of Two Primary Functions:
A. Litigation Advisory Services And Investigative Services
B. Expressing An Opinion Of Guilt Or Innocence In Court Regarding Audit
Results And Documenting The Steps Taken To Reach That Opinion
C. Subjecting Accounting Data To A Benford Analysis And Explaining The
Results To A Judge Or Jury
D. Providing Courtroom Testimony And Administrative Technical Guidance To
Attorneys
15. Forensic And Valuation Services (FVS) Professionals Can Expect That:
A. Their Opinion Will Be Carefully Noted In Court.
B. The Attorney For Opposing Counsel To Defer To The FVS Professional’s Expert
Opinion On Matters Pertaining To Forensic Accounting.
C. Their Work Will Be Carefully Scrutinized By The Opposing Side And That
3 of 11
