FORENSIC ACCOUNTING - FINAL EXAM UPDATED QUESTIONS AND CORRECT ANSWERS

FORENSIC ACCOUNTING - FINAL EXAM UPDATED
QUESTIONS AND CORRECT ANSWERS

Question:
1. An AICPA committee in 1986 broke forensic accounting into two broad areas:
Answer:
Investigative accounting and litigations services

Question:
2. Which would not be included in the AIC- PA's definition of forensic accounting?
A. Auditing
B. investigative skills
C. quantitative methods
D. Accounting
E. none of the above
Answer:
E. none of the above

Question:
3. What are the six areas of litigations services that the AICPA committee suggested in 1986?
Answer:
Bankruptcy, Business and real estate valuation, Lost profits/damages calculation, Marital dissolution, Tax
issues assessment/analysis, General consulting.

Question:
4. When comparing a forensic audit with a financial audit, which item would indicate a financial audit?
A. More time-consuming
B. Worrying about the rules of evidence
C. Extensive use of interviewing
D. A sampling process
E. All of the above
Answer:
D. A sampling process

Question:
5. Which characteristic would not indicate a forensic accounting investigation?
A. principles-based
B. narrow investigation scope
C. proactive and ongoing
D. future and historical
E. none of the above
Answer:
narrow investigation scope

Question:
6. Forensic accounting and fraud auditing are synonymous (True or False?)

,Answer:
False

Question:
7. Peremptory refers to the fact that a forensic accountant can be proactive (True or False?)
Answer:
True

Question:
8. A forensic accountant uses interviews and leveraging techniques designed to elicit sufficient information
to prove or disprove a hypothesis (True or False?)
Answer:
True

Question:
9. A fraud examination tends to be proactive (True or False?)
Answer:
False, tends to be reactive

Question:
10. The forensic accounting field is broader than fraud auditing (True or False?)
Answer:
True

Question:
11. A forensic accountant can normally assume that the books and records are true and accurate (True or
False?)
Answer:
false

Question:
12. Data-driven forensic techniques will always detect fraud schemes, including bribery and kickbacks
(True or False?)
Answer:
False

Question:
13. Which statement is false?
A. Fraud courses are increasing in the United States
B. Practitioners rank litigation services higher than educators
C. Finding fraud is not easy
D. The fraud triangle is not helpful in identifying who the bad guy/gal may be
E. none of the above
Answer:
D.

, Question:
14. Why is the use of computer software more common in financial statement audits and fraud
examinations?
A. key word searches can help identify fraud
B. It is more comprehensive and cost effective
C. Majority of information is stored digitally
D. All of the above
E. None of the above
Answer:
D. All of the above

Question:
15. The burden of proof in a criminal proceeding is:
Answer:
beyond a reasonable doubt

Question:
16. The burden of proof in a civil proceeding is:
Answer:
preponderance of the evidence

Question:
17. Briefly discuss the seven areas of knowledge and skill sets that effective forensic accountants have, and
which one did Professor John believe was the most important to have?
Answer:
Auditing Skills, Investigative Knowledge/Skills, Criminology, Accounting Knowledge, Information
technology knowledge, Communication skills, Legal Knowledge

Question:
18. Theft is similar to embezzlement (True or False?)
Answer:
False, theft is similar to larceny

Question:
19. Larceny is best defined as the taking of:
Answer:
property of another without consent or permission

Question:
20. Account receivables are the favorite target of fraudsters (True or False?)
Answer:
false, its cash

Question:
21. What is the difference between larceny and skimming?
Answer:
Larceny = funds have been recorded on the books Skimming = funds have not been recorded on the books