For income tax purposes fraudulent losses may be classified as:
a.Deductions.
b.Offsets to reportable revenues.
c.Reductions in retained earnings.
d.Both A and B.
Which of the following is a phase of an audit?
a.The engagement letter.
b.Meeting with the audit committee.
c.Industry comparisons.
d.Completion of the audit and issuance of the audit report.
If the investigator is seeking a signed confession, when should this confession be
presented for signature?
a. Prior to the interview.
b. Within 30 days of the interview.
c. During the interview, but allow the suspect to take it to their legal counsel for review.
d. During the interview.
Who do most companies choose not to pursue fraudsters for repayment?
a. Most fraudsters do not have the assets to repay even if found guilty.
b. Most companies have insurance to cover the loss.
c. Most fraudsters voluntarily repay what they have stolen.
d.Both A and B
Which of the following is NOT an option for Fraud Loss Recovery?
a.Accept the loss.
b.Collect Insurance if available.
c. Litigate
d. Have law enforcement seize personal assets of the fraudster.
The Foreign Corrupt Practices Act and the Sarbanes-Oxley Act hold whom criminally
liable for weak internal control processes?
a.CFO.
b.COO
c.CEO
d.Both A and C
Which of the following countries had some of the largest terrorist training camps prior
to 9/11?
a.Afghanistan.
b.Iraq.
c.Pakistan.
d.All of the above.
If the person hired to resolve the dispute is actively expressing opinions about the facts
of the case and the reasonableness of the participants’ negotiating positions then he or
she is a(n):
a.Arbitrator
b.Negotiator
c.Rented Judge
d.Mediator
Actions that provide evidence that a process was deliberately done to deceive,
undermine, or conceal the true nature of events is referred to as:
a.Affirmative indications.
b.Positive indications.
c.Affirmative acts.
d.Criminal acts.
Pattern data analysis is also known as:
a.3rd party verification.
b.Data mining.
c.Data milling.
d.Forensic Data Analysis.
A tolerable misstatement is:
a.A percentage threshold, such as 2%, of variance allowed in net income.
b.Zero as all accounts must represent 100% accuracy.
c.A set amount, such as $100,000, that an account can be misstated before an auditor
will call for a preliminary judgment.
d.An amount set by the FASB based upon the industry the company is in.
When employees use a cash register, how should each register drawer be maintained?
a.All employees on a shift should work from one register to alleviate multiple
reconciliations at the end of the day.
b.Only one employee should work at a specific register and have authority to void sales
as they need to for greater customer satisfaction.
c.Only one employee should work at a specific register and have the ability to open the
register without a sale to facilitate making change for customers.
d.Only one employee should work at a specific register and they should never have
authority for special functions on a register.
Describe the ISMS Life Cycle and PDCA.
The fair value hierarchy represents of a continuum, defined along the lines of relative
certainty, of possibilities that may be used to estimate market value from historical data.
What is the Statement of Applicability (SOA) and what should it be consistent with?
a.The SOA is the end-product of the risk-assessment process and should be consistent
with the ISMS policy developed in the early stages of the PDAC process.
b.The SOA is the first draft of the risk-assessment process should be consistent with the
ISMS policy developed in the early stages of the PDAC process.
c.The SOA is the end-product of the risk-assessment process and should be
contradictive to the ISMS policy developed in the later stages of the PDAC process.
d.The SOA should be consistent with the risk assessment standards found in ISO 9002.
__________ are asked to determine whether the interviewee is a suspect and are only
asked when the interviewer believes that the interviewee is a suspect.
a. Leading questions
b. Assessment questions
c. Statements of fact
d. Accusing questions
The first major computer crimes act was:
a.The Sarbanes-Oxley (SOX) Act of 2002.
b.Computer Fraud and Abuse Act.
c.The Cyber Intrusion Detection Act of 1996.
d.Computer Detection Infiltration Act.
For all fraud investigations, it is essential that a(n) ____________ be created.
a.Affidavit of findings
b.Unified case file
c. Sworn statement file
d.Working paper archive
Financial statement fraud is:
a.Putting forth another company’s financial statements as your own.
b.Any intentional or grossly-negligent violation of GAAP that is undisclosed and
materially affects any financial statement.
c.Any intentional or grossly-negligent violation of GAAP that is undisclosed and affects
any financial statement.
d.When the CEO and CFO do personally sign the financial statements.
Which act or law created severe criminal penalties for fraud in a bankruptcy
proceeding?
a.IRC revision of 1986.
b.SEC ruling of 2001.
c.U.S. Supreme Court Rulings of 2003.
d.Section 802 of the Sarbanes-Oxley Act of 2002.
Some standard defenses include the following:
a. All of the below are possible standards of defense.
b.Someone else did it.
c. A hacker did it.
d. Those were simply errors and not fraudulent entries.
Arbitration also involves a:
a.rented judge
b. rented jury
c. neutral third party
d. Both A and B
Proof of loss claims may not be paid until:
a.A confession is signed.
b.The fraudster is found guilty in a court of law.
c.The fraud investigation is complete.
d.All of the above.
What did the Fair and Accurate Credit Transaction Act of 2003 (FACTA) accomplish?
Why would a forensic accountant want to investigate prior W-2’s during a bankruptcy
or divorce fraud investigation?
a.It may show investment income from investments not previously disclosed.
b.It may show the purchase of assets through a business that has been written off for
depreciation.
c.It could show contributions to Keogh plans.
d.It could show contributions to 401K, 403(b) and other deferred compensation plans.
In order for actual losses to occur in the bad-news case, the buyer must:
a.Buy and sell within the FCIIP period.
b.Buy before the FCIIP period and sell within it.
c.Buy before the FCIIP period and sell after it.
d.Buy within the FCIIP period and sell after it.
Since there 3 levels of synergy and 2 rates of speed, there is a total of ______ possible
combined value premises.
a.2.
b.3.
c.5.
d.6.
The scheme where normally the books are “closed” at the end of each reporting period,
and sales that occur after the closing date do not appear in the current-period income
statement is called:
a.Sham sales.
b.Recognition of conditional sales.
c.Improper cutoff of sales.
d.Consignment sales.
Through Net Worth Analysis, you are attempting to determine:
a. Total earnings for a period of years.
b.The change in net worth for the year.
c. The amount of debt financing.
d. None of the above
What are forms of assurance come for information security?
a.Informal or Semi-formal.
b.Formal Certification by an Accredited Certification Body.
c.Self Certification.
d.All of the above.
Under the market approach, the value of the asset is what the asset can be sold for in an
open market within:
a.The immediate future.
b.30 days.
c.60 days.
d.A reasonable time frame.
The three risk management controls are:
a.Preventative, deterrence and collateral.
b.Preventative, detective and collateral.
c..Proforma, detective and corrective.
d.Preventative, detective and corrective.
If skimming has been in practice for years in a business, why might it be hard to detect
using horizontal analysis?
a.Comparing a year in which receipts have been skimmed to other years in which.
receipts have been skimmed will usually not reveal differences.
b.Horizontal analysis is typically performed in industries that have high skimming rates.
c.Gross margins for the industry typically won’t reveal any fraud when evaluated via
Horizontal analysis.
d.Skimming typically is revealed on the income statement and horizontal analysis is
only done on balance sheet accounts.
When does the fraud investigation engagement process begin?
a.With first contact to an organization.
b. After a 12-month follow-up audit
c. With a complete agreement regarding the fraud-investigation services to be provided
by the investigator.
d. Upon conviction of a criminal.
Describe and explain the importance of the interview
When does mediation work best?
a.When one party has information on the other that makes them succumb to the others
demands.
b.When both parties are at the end of their ropes and ready to sue each other.
c.When both sides desire in advance to reach a negotiated solution.
d.When one side desires in advance to reach a negotiated solution.
What happens to some businesses if they have been the victim of payroll tax
embezzlement and how can the fraud investigators report assist them?
Which of the following is a step in the fraud-theory approach?
a. Prove the hypotheses invalid.
b. Refine and amend the hypotheses.
c. Link the hypotheses to a GAAP.
d. None of the above are a step in the fraud-theory approach.
How does one become an associate in an organized crime family?
a.Be invited to join the organization by a friend.
b.File an application.
c.Be recruited by a head hunter.
d.Start your own organized crime racket and get assimilated by a larger one.
If two or more people agree to commit a crime, with even the smallest amount of
coordination, they have committed a:
a.Conspiracy.
b.Robbery.
c.Burglary.
d.Fraud.
According to the U.S. Department of Justice, what percentage of bankruptcy cases
involve fraud?
a.5%.
b.10%.
c.25%.
d.50%.
The valuation approached of income is the value of the asset is the present value of the
future economic income associated with the asset. Explain the main problem with this
approach.
What are the two main reasons that independent investigator will not draw conclusions
regarding guilt or innocence?
a. Investigators are not deputized and have not earned a law degree.
b.Guilt and innocence are generally a matter of opinion and opinion regarding guilt
could open up the investigator to a law suit for defamation.
c. Guilt and innocence are facts of matter and investigators will hand their findings over
to law enforcement.
d.None of the above are reasons.
What are some additional elements that should be added to an organization if a Fraud
Detection Hotline is going to be established?
What type of employee typically sabotages files?
a.Management.
b.Clerical.
c.Disgruntled.
d.Programmers.
The fundamental value of an asset can be determined by:
a.Analytical methods that seek to find the “true value” or the “underlying value” of an
asset.
b.Researching its replacement value and then deducting its depreciation from it.
c.Looking at its book value on the balance sheet.
d.Reducing the cost of purchase for an asset by a MACRS table from the IRS.
When using client employees to assist in the investigation, what must be considered?
a. That the employee is a part of the fraud being committed.
b. That the employee be placed on the payroll of the investigating firm.
c. That the employee themselves are not part of the fraud being committed.
d.That the employee should perform the investigation work from home or another
office.
The levels of Evaluation Assurance Levels do what for each other?
a.Contradict.
b.Compliment.
c.Provide increasing levels of assurance.
d.Negate.