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Forensic Accounting and Fraud Examination
By: Mary-Jo Kranacher, Richard Riley
3rd Edition
1 of 11
,Table of Contents
Section i Introduction to Forensic Accounting and Fraud Examination
1 Core Foundation Related to Forensic Accounting and Fraud Examination
2 Who Commits Fraud and Why: The Profile and Psychology of the Fraudster
3 Legal, Regulatory, and Professional Environment
Section ii Fraud Schemes
4 Cash Receipt Schemes and Other Asset Misappropriations
5 Cash Disbursement Schemes
6 Corruption and the Human Factor
7 Financial Statement Fraud
Section iii Detection and Investigative Tools and Techniques
8 Fraud Detection: Red Flags and Targeted Risk Assessment
9 Evidence-Based Fraud Examinations
10 Effective Interviewing and Interrogation
11 Using Information Technology for Fraud Examination and Financial Forensics
Section iv Advanced Topics in Forensic Accounting and Fraud Examination
12 Complex Frauds and Financial Crimes
13 Cybercrime: Fraud in a Digital World
14 Antifraud and Compliance Efforts: Ethics, Prevention, and Deterrence
Section v Litigation Advisory Services and Remediation
15 Consulting, Litigation Support, and Expert Witnessing: Damages, Valuations, and Other
Engagements
16 Remediation and Litigation Advisory Services
2 of 11
, 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
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, 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
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Forensic Accounting and Fraud Examination
By: Mary-Jo Kranacher, Richard Riley
3rd Edition
1 of 11
,Table of Contents
Section i Introduction to Forensic Accounting and Fraud Examination
1 Core Foundation Related to Forensic Accounting and Fraud Examination
2 Who Commits Fraud and Why: The Profile and Psychology of the Fraudster
3 Legal, Regulatory, and Professional Environment
Section ii Fraud Schemes
4 Cash Receipt Schemes and Other Asset Misappropriations
5 Cash Disbursement Schemes
6 Corruption and the Human Factor
7 Financial Statement Fraud
Section iii Detection and Investigative Tools and Techniques
8 Fraud Detection: Red Flags and Targeted Risk Assessment
9 Evidence-Based Fraud Examinations
10 Effective Interviewing and Interrogation
11 Using Information Technology for Fraud Examination and Financial Forensics
Section iv Advanced Topics in Forensic Accounting and Fraud Examination
12 Complex Frauds and Financial Crimes
13 Cybercrime: Fraud in a Digital World
14 Antifraud and Compliance Efforts: Ethics, Prevention, and Deterrence
Section v Litigation Advisory Services and Remediation
15 Consulting, Litigation Support, and Expert Witnessing: Damages, Valuations, and Other
Engagements
16 Remediation and Litigation Advisory Services
2 of 11
, 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
3 of 11
, 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
4 of 11
