CHAPTER 7 FRAUD AND FORENSIC ACCOUNTING Questions with Correct Solutions

CHAPTER 7: FRAUD AND FORENSIC ACCOUNTING Questions with
Correct Solutions

Question:
1. what is fraud

Answer:
a material false statement


Question:
2. legal elements of fraud

Answer:
1. A material false statement
2. Knowledge that the statement was false when it was spoken
3. Reliance on the false statement by the victim
4. Damages resulting from the victim's reliance on the false statement


Question:
3. major categories of fraud

Answer:
- Asset Misappropriation
- Corruption and Abuse
- Financial Statement Fraud


Question:
4. Common Fraud Schemes

Answer:
larceny, skimming, bribery, fraudulent disbursement, conflicts of interest, fraudulent
financial statements


Question:
5. what is forensic accounting

Answer:
1. litigation advisory services
2. investigative services


Question:
6. skill set for financial forensic professional and fraud examiner

Answer:
technical competency, investigative proficiency, thinking critically

, Question:
7. auditing

Answer:
risk assessment, internal controls


Question:
8. litigation support

Answer:
calculation of economic damages, marital dissolution, business valuation


Question:
9. fraud perpretator profile

Answer:
male, well educated, middle-aged to retired, accountant, upper management or executive,
with company for more than 5 yrs, acts alone, never charged or convicted of a criminal
offence


Question:
10. Costs of Fraud and Litigation

Answer:
$3.7 trillion annually


Question:
11. fraud triangle

Answer:
perceived opportunity, perceived pressure, rationalization


Question:
12. MICE

Answer:
Money Ideology Coercion Ego


Question:
13. professional skepticism

Answer:
recognition, attitude, commitment