FORENSIC ACCT, FINAL TEST | 146 QUESTIONS AND
ANSWERS | LATEST UPDATE | WITH COMPLETE
SOLUTION
Which of the following is a true statement?
a) Judges and juries, not accountants, are responsible for concluding whether
specific conduct meets the legal definition of fraud.
b) A fraud audit is an attest service defined by the American Institute of
Certified Public Accountants.
c) Fraud is most often detected by external auditors.
d) As part of an audit under generally accepted audit procedures, CPAs form a
conclusion as to whether a company has experienced fraud. Answer - a)
Judges and juries, not accountants, are responsible for concluding whether
specific conduct meets the legal definition of fraud.
While we frequently discuss fraud and fraud characteristics, and investigate
potential frauds, the ultimate conclusion as to whether specific conduct meets
a legal definition is the responsibility of judges and juries.
Skimming is defined as:
,a) A scheme in which the perpetrator alters the company's checks and converts
them to inappropriate us
b) A scheme involving fraudulent wire transfers to a personal account.
c) A scheme that involves cash thefts by setting up one or more fictitious
employees on the payroll system.
d) A scheme in which cash receipts are stolen from an enterprise before they
are recorded on the books and records. Answer - d) A scheme in which cash
receipts are stolen from an enterprise before they are recorded on the books
and records.
Response Feedback:
Skimming is defined as an asset misappropriation scheme that involves taking
cash receipts before they are recorded on the books and records.
True or False?
According to the ACFE, a company is more likely to initially detect an
occupational fraud scheme by a whistleblower tip than by an external audit.
Answer - True
Which of the following is not a true statement?
a) Forensic accountants work as part of government enforcement agencies,
such as the FBI.
,b) Testimony as an expert witness and communicating findings is outside the
work of forensic accountants.
c) Forensic accountants analyze business issues in legal disputes.
d) Forensic accountants sometimes focus on financial statement frauds and
embezzlements. Answer - b) Testimony as an expert witness and
communicating findings is outside the work of forensic accountants.
Forensic accountants analyze business issues in legal disputes.
Response Feedback:
All of the answers describe elements of forensic accounting. Forensic
accounting includes the work to communicate our findings, including in the
context of testimony, so it is not outside the scope of our work.
The American Institute of Certified Public Accountants describes two types of
forensic accounting services. They are (check two):
a) Investigative services
b) Insurance services
c) Enforcement services
d) Detective services
e) Litigation services Answer - a) Investigative services
, e) Litigation services
True or False?
People who perpetrate frauds are usually identified by formal background
checks, when they are performed. Answer - False
When an employee misappropriates case by diverting a payment from one
customer for their own use, and then hides the defalcation by diverting cash
receipts from another customer to offset the receivable from the first
customer, the scheme is called _________________.
a) Lapping
b)Application error
c) Account shelling
d) Skimming Answer - a) Lapping
Response Feedback:
Correct. This is lapping.
KleptoBan Corporation has 1,500 employees worldwide. In a recent internal
audit finding, KleptoBan identified that 10 of their employees have the same
address and direct deposit information. The internal auditor should suspect
which type of scheme?
a) Expense reimbursement fraud
ANSWERS | LATEST UPDATE | WITH COMPLETE
SOLUTION
Which of the following is a true statement?
a) Judges and juries, not accountants, are responsible for concluding whether
specific conduct meets the legal definition of fraud.
b) A fraud audit is an attest service defined by the American Institute of
Certified Public Accountants.
c) Fraud is most often detected by external auditors.
d) As part of an audit under generally accepted audit procedures, CPAs form a
conclusion as to whether a company has experienced fraud. Answer - a)
Judges and juries, not accountants, are responsible for concluding whether
specific conduct meets the legal definition of fraud.
While we frequently discuss fraud and fraud characteristics, and investigate
potential frauds, the ultimate conclusion as to whether specific conduct meets
a legal definition is the responsibility of judges and juries.
Skimming is defined as:
,a) A scheme in which the perpetrator alters the company's checks and converts
them to inappropriate us
b) A scheme involving fraudulent wire transfers to a personal account.
c) A scheme that involves cash thefts by setting up one or more fictitious
employees on the payroll system.
d) A scheme in which cash receipts are stolen from an enterprise before they
are recorded on the books and records. Answer - d) A scheme in which cash
receipts are stolen from an enterprise before they are recorded on the books
and records.
Response Feedback:
Skimming is defined as an asset misappropriation scheme that involves taking
cash receipts before they are recorded on the books and records.
True or False?
According to the ACFE, a company is more likely to initially detect an
occupational fraud scheme by a whistleblower tip than by an external audit.
Answer - True
Which of the following is not a true statement?
a) Forensic accountants work as part of government enforcement agencies,
such as the FBI.
,b) Testimony as an expert witness and communicating findings is outside the
work of forensic accountants.
c) Forensic accountants analyze business issues in legal disputes.
d) Forensic accountants sometimes focus on financial statement frauds and
embezzlements. Answer - b) Testimony as an expert witness and
communicating findings is outside the work of forensic accountants.
Forensic accountants analyze business issues in legal disputes.
Response Feedback:
All of the answers describe elements of forensic accounting. Forensic
accounting includes the work to communicate our findings, including in the
context of testimony, so it is not outside the scope of our work.
The American Institute of Certified Public Accountants describes two types of
forensic accounting services. They are (check two):
a) Investigative services
b) Insurance services
c) Enforcement services
d) Detective services
e) Litigation services Answer - a) Investigative services
, e) Litigation services
True or False?
People who perpetrate frauds are usually identified by formal background
checks, when they are performed. Answer - False
When an employee misappropriates case by diverting a payment from one
customer for their own use, and then hides the defalcation by diverting cash
receipts from another customer to offset the receivable from the first
customer, the scheme is called _________________.
a) Lapping
b)Application error
c) Account shelling
d) Skimming Answer - a) Lapping
Response Feedback:
Correct. This is lapping.
KleptoBan Corporation has 1,500 employees worldwide. In a recent internal
audit finding, KleptoBan identified that 10 of their employees have the same
address and direct deposit information. The internal auditor should suspect
which type of scheme?
a) Expense reimbursement fraud
