1) Lifestyle audits, conducted by the IRS, are a means of determining tax evasion.
2) All of the following methods indicate how people commit financial statement fraud
EXCEPT:
Q.Bribe the SEC to accept fraudulent financial statements
R.Playing the accounting system
S.Beating the accounting system
T.Going outside the accounting system
3) In this type of scheme, an employee knows his or her employer is seeking to
purchase a certain asset and takes advantage of the situation by purchasing the asset
himself or herself (usually in the name of an accomplice or shell company).
L.Turnaround sale
M.Illegal gratuity
N.Economic extortion
O.Conflict of interest
4) Direct evidence consists of a supervisors opinion as to the plaintiffs mental state at
the time of the crime.
5) Discuss alternative courses of action in the Enron case within the framework of
appropriate ethical conduct.
6) The issues addressed by a forensic accountant during litigation must be central to the
allegations made by the plaintiffs or defense attorneys.
7) Why is it problematic for an organization to set standards that are too high?
8) If a fraudster has a hand in both ends of the receipting process, he or she can falsify
records to conceal the theft of receivables payments. This technique is called:
I.Lapping
J.Kiting
K.Force balancing
L.Debiting the wrong account
9) Give examples of nonfraud forensic and litigation advisory engagements.