When auditors are judging materiality, they are concerned with:
a.Magnitude.
b.Errors.
c.Intentional omissions.
d.All of the above.
Which of the following would not be a part of the forensic accountants profile of a
suspect?
a.Length of time suspect has been with the firm.
b.Suspect’s assets.
c.Suspect’s outstanding bills, including recent purchases such as cars and real estate.
d.Suspects children’s school grades.
What does the average annual percentage rate figure out to for loan-shark loans?
a.8%.
b.28%.
c.100%.
d.300%.
Data theft is typically easier to:
a.catch than prevent.
b.prevent than identify.
c.detect than prosecute.
d.prosecute than detect.
The relationship of risks for a specific client may change:
a.Daily.
b.Monthly.
c.From year to year.
d.From audit to audit.
The National Litigation Support Services Association (NLSSA) allows only one CPA
firm into its membership:
A.In each Metropolitan Statistical Area.
b.In each Megalopolis.
c.Per million residents in the city it resides.
d.Each four year presidential cycle.
Internal controls can be viewed as:
a.a means to limit the amount of money paid in a fraud suit.
b.a hindrance to productive business practices.
c.loss prevention tools.
d.loss detection tools.
Those controls that are relevant to implementing good internal control processes within
specific transaction cycles are called:
a.general controls.
b.transaction processing controls.
c.management controls.
d.all of the above.
If you are a litigation consultants and want to become credentialed by the National
Association of Certified Valuation Analysts (NACVA), which credential would you be
issued?
a.Certified Valuation Analyst.
b.Accredited Valuation Analyst.
c.Certified Forensic Financial Analyst.
d.National Valuation Analyst.
Why is input manipulation such a nightmare to prove?
a.A false audit trail could be created to point toward another employee.
b.The user could be inputting under another person’s credentials.
c.The user could erase their audit trail in the accounting system.
d.All of the above.
When declaring guilt or innocence, the Certified Fraud Examiner Code of Ethics states:
a. A fraud examiner must conclusively prove guilt or innocence in all cases of alleged
fraud.
b. No opinion shall be expressed regarding the guilt or innocence of any person or
party.
c. Guilt or innocence will be determined in conjunction with the wishes of the
corporation investigating the fraud.
d.The Certified Fraud Examiner Code of Ethics are intentionally silent on this topic.
A segment for the allocation of a preliminary judgment may be:
a.The income statement.
b.The balance sheet.
c.The accounts receivable and allowance for doubtful accounts.
d.The retained earnings statement.
If your actions are the result of misleading, intentional actions or inaction (including
misleading statements and the omission of relevant information) to gain an advantage,
then you have committed:
a. Perjury.
b. Contempt.
c. Treason.
d. Fraud.
Evidence can be:
a. Only tangible objects
b.Anything
c. Documents
d.Testimony
What can be the first step in violation of IRC 7205(a)?
a.An unsigned tax return.
b.A false W-4 form.
c.A false 1099 form.
d.Knowingly claiming more hours than worked on a time card.
The Congressional act that created stiffer penalties for identity theft, and even harsher
penalties for terrorist related identity theft, was called:
a.The Identity Terrorism Protection Act.
b.Identity Terrorism Penalty Enhancement Act.
c.United States Identity Penalty Enhancement Act.
d.Identity Theft Penalty Enhancement Act.
How many countries signed the United Nations Convention against Transnational
Organized Crime and its Protocols?
a.50.
b.100.
c.125.
d.150.
Which of the following should a forensic accountant analyze on a businesses financial
statements when considering business valuation?
a.Leverage.
b.Liquidity.
c.Solvency.
d.All of the above.
When are interviews conducted?
a. After a fraud theory is formed.
b. After careful review of documents.
c. Once a fraud scheme is defined.
d. All of the above
An example of a verbal cue might be:
a. Refusing to answer questions.
b. Shifting uncomfortably in a chair after a question is asked.
c. Clearing the throat when asked questions of guilt.
d. Yelling or verbally attacking the interviewer.
If the fraud involves payroll taxes collected for submission to the IRS, it is referred to
as:
a.Trust liability taxes.
b.Pass through taxes.
c.Withholding entity taxes
d.Trust fund taxes.
Forensic Accounting is defined as:
a. The practice of applying defined financial ratios to investigate a company’s financial
health.
b. The use of law enforcement to subpoena financial records to determine unlawful
actions.
c. 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.
d. The investigatory arm of the Securities and Exchange Commission.
If an accounting firm becomes involved in disputes with their clients and employees
they are now a(n):
a. mediator
b. dispute participant
c. arbitrator
d. plaintiff
How does the LCN hide its cash assets?
a.Money Market accounts.
b.Investment portfolios.
c.Offshore bank accounts.
d.Large assets in other people’s names.
How is non-custodial theft of money best prevented?
a.Through good internal controls.
b.Through good checks and balances.
c.Through good auditing practices.
d.Through good physical security.
If your process has reached maturity, and has achieved lower costs, shorter
development times, higher quality, and higher productivity, then it must have:
a.Process predictability.
b.Process control.
c.Process compliance.
d.Process effectiveness.
If law enforcement is called during an investigation, then:
a. Law enforcement will take over the investigation and the business will be forced to
comply with whatever demands they have.
b.There may still be some give and take as to what the process will be.
c. The fraud investigator will serve as the liaison between law enforcement and the
business.
d. Law enforcement will not be called during a fraud investigation because District
Attorneys are the sole legal enforcement agent for any fraud crime.
What types of organizations offer credentials to forensic accountants?
a.Association of Certified Fraud Examiners.
b.American College of Forensic Examiners.
c.Institute of Business Appraisers.
D.All of the above.
How does a suspect become “read’ during the interview process?
a.Through verbal clues.
b.Through non-verbal clues.
c.Through building rapport with the suspect.
d.All of the above.
If an investigator is asked to provide a copy of their report to a 3rd party, such as law
enforcement, what should they do first?
a. Have company counsel review the documents to ensure no proprietary information is
being released.
b. Obtain written authorization from the company that hired them first.
c. Ensure law enforcement is going to arrest the fraudster first.
d.Ask the 3rd party to provide a written authorization from the company.
Any lack of independence between management, internal auditors, and external
auditors undermines the basic structure that prevents financial statement fraud. What
type of red flag does this represent?
a.Internal control process.
b.Management style.
c.Personnel practices and environment.
d.The government structure.
If a corporation must restate its financial statements due to miss-conduct, what must the
CEO and CFO do?
a.Remove themselves from their positions within the corporation.
b.Form an internal control review committee.
c.Issue a stock-bonus to all shareholders.
d.Disgorge themselves of any profits from the sale of the company’s securities, bonuses,
or general incentive compensation.
Title VIII–Corporate and Criminal Fraud Accountability sets forth penalties for senior
managers and directors if they knowingly defraud shareholders of publicly traded
companies; what is the prison term?
a.5 years.
b.10 years.
c.15 years.
d.25 years.
For each count that a taxpayer is found guilty under IRC 7201 which of the following is
not a potential punishment?
a.Fines up to $250,000.
b.Imprisonment up to 5 years.
c.Cost of prosecution.
d.Community service.
Hiring a relative that is untrained and paying them at a higher rate is an example of:
a.Accounts receivable fraud.
b.Expenditure cycle fraud.
c.Payroll fraud.
d.Lapping of accounts receivables.
What are the 3 ISMS security objectives?
a.Assess, modify, implement.
b.Integrate, evaluate, modify.
c.Confidentiality, integrity, availability.
d.Integrity, evaluation, implementation.
The Public Company Accounting Oversight Board was created by the ________?
a.Sarbanes-Oxley Act of 2002.
b.Securities and Exchange Commission.
c.Financial Accounting Standards Board.
d.United States Congress.
Contrast and compare mediation and arbitration.
The Capitalized Excess Earnings Method combines which two methods?
a.Income and asset approaches.
b.Income and market approaches.
c.Asset and market approaches.
d.None of the above.
Describe the different ways in which fraud is detected.
How can an organization have some type evidence-based assertion that increases one’s
certainty that a security-related deliverable can withstand specified security threats?
a.Through Risk Analysis Matrix.
b.Through Information security assurance (ISA).
c.Through Internal Controls.
d.Through hiring hackers to test the system.
In what area has the ROC become especially well known?
a.As computer hackers.
b.As designer drug traffickers.
c.As human traffickers.
d.All of the above.
What is the primary difference between CPA’s and Enrolled Agents?
a.Enrolled Agents are the only ones allowed to represent taxpayers in front of the IRS.
b.Enrolled Agents generally know more about GAAP than CPAs.
c.Enrolled Agents pass a governmentally controlled national exam whereas CPAs pass a
non-governmental exam applicable to their state.
d.CPA’s must continue their education whereas Enrolled Agents do not.
The signed confession should be a(n) _______________ regarding the guilt of the
perpetrator.
a. Concise statement
b. Detailed account of the amount of fraud that has occurred.
c. Full statement recalling every time the fraud incurred.
d. Sleuth’s response answering all the questions of who, what, when, where, why and
how.
What are the members of a CART team?
Describe the various methods of persuading subjects to provide information
How does on-line dispute resolution work and what are its benefits?
What is the ultimate goal result of good physical evidence and when does it occur?
Under SOX Title XI, what is the SEC empowered to do?
a.Use the assets of the corporation it is investigating to pay for the on-going
investigation.
b.Lobby congress for specific laws to enable them to make gray areas they are
investigating illegal for quicker conviction rates.
c.Petition federal courts for temporary injunctions to freeze pending “extraordinary
payments” to certain individuals under investigation for possible violations of Federal
securities law.
d.All of the above.
Who are criminalists and what do they do?
Name and describe at least two roles Forensic Accountants can play in dispute
resolution.
What is the minimum number of comparable companies that should be selected when
calculating Guideline Publicly Traded Company Method?
a.3.
b.6.
c.12.
d.32.
During arraignment, the accused must be presented with a written copy of:
a.The charges.
b.The evidence against them.
c.Bail.
d.The jury.