Forensic and investigative accounting Quiz 1

In the future what will auditors rely on heavily? - answer-Auditing tools, help speed up and analyze information very quickly. Who was Frank Wilson? - answer-He was the IRS agent that prosecuted Al Capone In what huge bankruptcy caused forensic accountants to become rising stars? - answer-Enron and WorldCom What is the iceberg theory? - answer-What you know about could be the tip of an iceberg of lies! An AICPA fraud task force suggests that if a forensic accountant is brought into an audit to conduct a separate investigation what standards apply? - answer-Consulting standards How did Xerox pump up its earnings? - answer-Move money from cushion reserves to earnings though journal entries. How did WorldCom cook the books? - answer-Shifted 3.8 billion from operating expenses to capital accounts Tort - answer-Unintentional act against someone that causes them harm Negligence - answer-Failure to take proper care in doing something Five major phases of litigation - answer-1. Pleads 2. Discovery 3. Pre-trial conference 4. Trial 5. Outcome 6. Possible appeal Methods of discovery (6) - answer-1. Interogatories 2. Deposition 3. Admission of fact 4. Request for production 5. Subpoena 6. Asking to examine documents Types of Services from forensic accountants - answer-Consulting - not disclosed to other party Expert witness - everything disclosed Court - appointed experts Expert witness - answer-Testifies on opinion Lay witness - answer-Testifies on fact Qualifying as an expert - answer--Must use generally accepted techniques -qualified as witness -determine facts of the case using expertise What was the significants to Kumho Tire? - answer-Expanded doubert to all expert witnesses instead of just scientific testimony Cross examination technique - answer-During the cross examination they can ask you leading questions What phase are forensic accountants most involved in - answer-Deposition What should be the goal of an accountant in litigation support - answer-Keep a high level of independence and present data accurately and effectively. Try to keep the case out of court if possible In what court does Daubert apply? - answer-Federal court, Frye does not Discuss the difference between weight versus admissibility with respect to Daubert challenges - answer-Weight is how convincing the testimony is. Admissibility is if you are qualified to be an expert Doubert standard - answer-Opinions must be testable Have to check error rate on methodology used Direct Examination - answer-Comes from your side Cross Examination - answer-Com