Forensic Accounting Study Guide
|Question and Answers| UPDATED!!
Forensic accounting *Ans* is the application of investigative and analytical skills for the
purpose of resolving financial issues in a manner that meets standards required by courts of law.
Fraud *Ans* is the result of misleading, intentional actions or inaction to gain an advantage
Using deception for financial or personal gain.
forensic accounting into two categories: *Ans* 1. Investigative services that may or may not
lead to courtroom testimony. (fraud examiner or fraud auditor)
2. Litigation services that recognize the role of the accountant as an expert, consultant,
or other role. (TESTIMONY GIVEN)
Examples:
Expert witness testimony
Damage quantification
Asset tracing
Litigation support
,Forensic accountants *Ans* apply special skills in accounting, auditing, finance, quantitative
methods, certain areas of the law, research, and investigative skills to collect, analyze, and
evaluate evidential matter and to interpret and communicate findings
1. To what does the word forensic pertain?
a. Financial audits when fraud is involved.
b. A particular type of accounting. c. Matters relating to law and courts of law.
d. Prosecutorial investigations. *Ans* c
2. For an act to be considered fraud, which of the following is required?
a. Large loss.
b. Legal entity (e.g., a corporation, partnership, or trust).
c. Intentional harm.
d. Intentional action or inaction. *Ans* d
3. Which of the following is outside the area of forensic accounting?
a. Corporate acquisitions.
b. Divorce.
c. Contract disputes.
d. None of the above. *Ans* d
4. Which area of accounting is most closely associated with forensic accounting?
,a. Information systems.
b. Managerial accounting.
c. Consulting.
d. Auditing. *Ans* D
5. The Sarbanes-Oxley Act requires which of the following?
a. Auditors to receive specialized training in the act.
b. The CEO to certify the financial statements.
c. Management to institute a zero tolerance policy for fraud.
d. None of the above. *Ans* B
6. How do the objectives differ for forensic accountants (FAs) and external financial auditors
(EFAs)?
a. FAs are more thorough.
b. EFAs audit a broader range of transactions.
c. EFAs tend to concentrate their work more.
d. FAs tend to concentrate their work more. *Ans* D
7. How many categories does the American Institute of Certified Accountants use to clas- sify
forensic accounting?
a. 1.
b. 2.
c. 3.
, d. 4. *Ans* B
8. A forensic accountant who determines the amount of lost profits due to business inter- ruption
would be working in which of the following areas?
a. Valuation.
b. Estimation.
c. Financial determination.
d. Auditing. *Ans* A
9. Corporate scandals prompted companies to begin using which of the following?
a. Forensic audits.
b. Fraud-intensive audits.
c. Proactive fraud checkups.
d. Internal control systems. *Ans* C
10. Which of the following is the most recognized fraud credential?
a. CPA.
b. CMA.
c. CFE.
d. None of the above. *Ans* C
Fraud Examination *Ans* Investigation undertaken to determine the facts of a suspected
fraud.
|Question and Answers| UPDATED!!
Forensic accounting *Ans* is the application of investigative and analytical skills for the
purpose of resolving financial issues in a manner that meets standards required by courts of law.
Fraud *Ans* is the result of misleading, intentional actions or inaction to gain an advantage
Using deception for financial or personal gain.
forensic accounting into two categories: *Ans* 1. Investigative services that may or may not
lead to courtroom testimony. (fraud examiner or fraud auditor)
2. Litigation services that recognize the role of the accountant as an expert, consultant,
or other role. (TESTIMONY GIVEN)
Examples:
Expert witness testimony
Damage quantification
Asset tracing
Litigation support
,Forensic accountants *Ans* apply special skills in accounting, auditing, finance, quantitative
methods, certain areas of the law, research, and investigative skills to collect, analyze, and
evaluate evidential matter and to interpret and communicate findings
1. To what does the word forensic pertain?
a. Financial audits when fraud is involved.
b. A particular type of accounting. c. Matters relating to law and courts of law.
d. Prosecutorial investigations. *Ans* c
2. For an act to be considered fraud, which of the following is required?
a. Large loss.
b. Legal entity (e.g., a corporation, partnership, or trust).
c. Intentional harm.
d. Intentional action or inaction. *Ans* d
3. Which of the following is outside the area of forensic accounting?
a. Corporate acquisitions.
b. Divorce.
c. Contract disputes.
d. None of the above. *Ans* d
4. Which area of accounting is most closely associated with forensic accounting?
,a. Information systems.
b. Managerial accounting.
c. Consulting.
d. Auditing. *Ans* D
5. The Sarbanes-Oxley Act requires which of the following?
a. Auditors to receive specialized training in the act.
b. The CEO to certify the financial statements.
c. Management to institute a zero tolerance policy for fraud.
d. None of the above. *Ans* B
6. How do the objectives differ for forensic accountants (FAs) and external financial auditors
(EFAs)?
a. FAs are more thorough.
b. EFAs audit a broader range of transactions.
c. EFAs tend to concentrate their work more.
d. FAs tend to concentrate their work more. *Ans* D
7. How many categories does the American Institute of Certified Accountants use to clas- sify
forensic accounting?
a. 1.
b. 2.
c. 3.
, d. 4. *Ans* B
8. A forensic accountant who determines the amount of lost profits due to business inter- ruption
would be working in which of the following areas?
a. Valuation.
b. Estimation.
c. Financial determination.
d. Auditing. *Ans* A
9. Corporate scandals prompted companies to begin using which of the following?
a. Forensic audits.
b. Fraud-intensive audits.
c. Proactive fraud checkups.
d. Internal control systems. *Ans* C
10. Which of the following is the most recognized fraud credential?
a. CPA.
b. CMA.
c. CFE.
d. None of the above. *Ans* C
Fraud Examination *Ans* Investigation undertaken to determine the facts of a suspected
fraud.
