A judge may request additional information involves consequential damages prior to
ruling on the case.
The SAP module approach is inherently better than the transaction cycle approach.
In the majority of cases, an IRS enforcement action for FSF is associated with
bankruptcy or a change in ownership.
An investigator will want to know as much as possible about their interviewee prior to
the interview.
COSO is a private, independent group that is sponsored by some of the very top
private-sector accounting organizations, including the American Institute of Public
Accountants, The American Accounting Association, and the Financial Executive
International.
Japan and the United States are working together to stop criminal organizations through
the FBI/National Police Agency of Japan Working Group.
Forensic Accounting does not greatly differ from traditional accounting.
Transaction processing controls are those controls that are relevant to auditing internal
control processes within specific transaction cycles.
One specific component of internal control is risk assessment and management.
Under the market approach, the value of the asset is what the asset can be sold for in an
open market within some reasonable time period.
If bank deposit slips are not reconciled against bank deposit receipts, leakage can occur.
Due to its complexity, the forensic accountant cannot perform a complete cash flow
analysis for the individual or entity under investigation.
The interviewer should always use terms such as “audit” and “investigation”; instead of,
he “assignment” and “inquiry”.
Some forensic accountants perform investigations much like financial private
investigators.
Fraud discovery departments are typically assigned to the HR Director.
The audit trail is the most important concept when catching employee fraud.
Normally, markets reward profitability.
Part of the fraud investigation process involves filing charges with a District Attourney.
Information from third parties can never be used during an auditor’s duty.
The investigator should never tell the fraudster to make restitution or she will report the
fraudster to law enforcement.
An investigator should always remain a part of the investigation, even if it means they
will have to commit an illegal act.
SOX released auditors from the requirement of to reporting to the audit committee all
material written communications between the audit firm and the client.
Social networking sites such as Facebook and MySpace can be a source of evidence.
Gap analysis focuses on identifying needed governmental controls that are not already
in place.
Appraisal organizations that issue credentials are all a part of the U.S. Government or
United Nations.
Roughly two thirds of the employees of the Criminal Investigations Division are special
agents, elite tax financial investigators who are duly sworn law enforcement officers.
Many government agencies also have an inspector general, whose job includes
investigating possible frauds.
A confession should be presented and signed during the interview when possible
An investigator will work their fraud hypothesis until it is proven.
A good practice is for the investigator to discuss any doubtful wording with her
insurance company before releasing it to the client.
The ISMS is a stand-alone process.
What is a way to become a CFS?
a.Complete a multi-part examination that covers the detection, deterrence, investigation,
and prosecution of white-collar crime.
b.Complete the ACFS Academy core courses and take an examination at the end of
each course.
c.Be grandfathered in by means of submitting information on the experience and
education of the candidate.
d.All of the above are ways to become a CFS.
Once a replacement cost is calculated, it is customary to:
a.Adjust the price of the asset upward to account for depreciation that was deducted in
the replacement calculations.
b.Adjust the price of the asset downward to account for its age.
c.Marginalize the cost calculated by current market conditions.
d.Average the cost calculated by the original cost of the asset.
How does check washing occur?
a.False checks are submitted to banks within large batches of good checks in hopes that
they will not be detected.
b.The ink from a good check is chemically removed and then a new check can be
written from that check.
c.A check from one customer is stolen and the next check is used to cover that amount
and so on.
d.The check is altered or tampered.
Which of the following is not a report that OMB Circular A-133 requires?
a.A report that includes an opinion on whether the financial statements are presented in
accordance with GAAP.
b.A report that includes an opinion on whether the schedule of Federal awards is
presented fairly and is consistent with the financial statements.
c.A report on the entity’s internal controls over financial reporting and its major
programs.
d.A report that other auditor’s findings of errors/misrepresentations have been addressed
and corrected.
If a motion in limine is made, the judge may:
a.Excuse some jury members.
b.Exclude some evidence.
c.Modify bail conditions.
d.Provide a lawyer to the defendant.
The primary control in the purchasing side of the finance cycle is that:
a.only purchasing officials should place the actual order.
b.payments only be made by an independent treasury function based on approved
invoices from other departments.
c.payments only be made by the department that placed the order.
d.an audit trail must include a cost justification and vendor selection listing.
A process that allows information in various databases and files to be evaluated and
integrated in such a way that associations become apparent is called a(n):
a. Boon-lean search
b. Query
c. Link Analysis
d. Financial Records Search Warrant
The classic definition of fraud is:
a.An intentional misrepresentation of fact by some perpetrator.
b.A reliance upon the misrepresentation by some victim.
c.An injury to the victim resulting from reliance upon the misrepresentation.
d.All of the above.
How can a company detect data theft?
a.By reviewing suspected employee E-mail logs.
b.By reviewing suspected employee access logs.
c.By reviewing suspected employee building access logs.
d.All of the above.
How many hypothesis are allowed during an investigation?
a. 1
b. 2
c. 3
d. As many as can be interrelated to the fraud.
What are the four types of evidence collected in the evidence collection process?
a. Physical evidence, financial statement evidence, observational evidence, and
interview evidence.
b. Physical evidence, documentary evidence, tip hotline evidence, and interview
evidence.
c. Physical evidence, documentary evidence, observational evidence, and witness
evidence.
d.Physical evidence, documentary evidence, observational evidence, and interview
evidence.
The four roles that forensic accountants can assist in the out of court settlement process
is often referred to as the:
a.Arbitration process.
b.Litigation process.
c.Expert assistance process.
d.Mediation process.
Where are fraud discovery personnel assigned within an organization?
a.Within the customer service department.
b.Within the Human Resources department.
c.As their own department, operating independently.
d.Within any department that typically has the highest risk for fraud
Which of the following types of organizations typically use Forensic Accountants?
a.Publicly held corporations.
b.Private/non-profit corporations.
c.Federal/State Agencies.
d.All of the above.
In regards to the accounting industry, what are the most important areas that the SEC
Chief Accountant deals with?
a.The FASB.
b.The IASB.
c.The AICPA.
d.All of the above.
Secretly transferring (or selling below market value) assets to others, perhaps to family
or friends, in order to keep them out of the bankruptcy estate and maintain control over
them is referred to as:
a.Concealment of assets fraud.
b.Multiple filing scheme.
c.Fraudulent conveyances.
d.Bust-outs.
The RICO provides a basis for which of the following:
a.Control over organized gambling.
b.Federal Witness Security Program.
c.Forfeiture of assets used to commit crimes.
d.All of the above.
If a systems developer is using a pre-developed system as a starting point for the final
system, he or she is using the:
a.classical approach.
b.business blueprint approach.
c.ERM approach.
d.Six-Sigma approach.
Which of the following is an example of vendor fraud?
a.short shipments.
b.balance billing.
c.substandard goods.
d.all of the above.
In many cases fraud indicators lead to:
a.The need for additional auditors to be present for the audit.
b.Criminal or civil actions against the CEO or CFO of the Corporation.
c.The discovery of errors or unusual events that can reasonably be explained upon
further examination.
d..The discovery of loop holed in the IRS Tax Code that are left up to interpretation.
In 2003, what board replaced the AICPA as the auditing standard-setter for companies
that are publicly held?
a.SOX.
b.SEC.
c.FASB.
d.PCAOB.
Almost all ongoing frauds schemes, no matter how sophisticated, have one weakness in
common:
a. The perpetrator is subject to being caught in the act.
b. The fraud can be detected through financial statement analysis.
c. The burden of proof is on the fraudster.
d. Law enforcement can arrest the fraudster at anytime.
What is a motive for financial statement fraud?
a.Covering up poor performance.
b.Capital acquisition.
c.Generic greed.
d.All of the above.
The burden of proof must be met to satisfy the judge or jury in which of the following
types of trials?
a.Civil.
b.Criminal.
c.Both a and b.
d.Trails involving monetary damages.
Incident handling applies primarily to the check (continuous evaluation) phase in the
_______ methodology.
a.ISO.
b.SOA.
c.ISMS.
d.PDAC.
The scope of the investigation serves to:
a. Place limits on the objectives of the investigation.
b. Expand on the investigation if other fraud is found.
c. Place limits on the breadth of the investigation.
d. Contract the focus of the investigation.
If you are testing a piece of evidence to determine if it is consistent with the fraud case,
you are performing a(n):
a. Hypothesis test
b. Investigation test
c. Litmus test
d. Hersey test
A false negative is:
a.When a detective control signals a possible fraud that upon investigation turns up a
reasonable explanation.
b.When a detective control fails to signal possible fraud when one exists.
c.When a preventative control signals a possible fraud that upon investigation turns up a
reasonable explanation..
d.When a preventative control fails to signal possible fraud when one exists.
Which of the following is NOT found in a fraud investigation report?
a.The address section.
b.Background information.
c.The approach.
d.The statement of guilt or innocence.
Determining what an asset will sell for within a reasonable time, in an open market,
with a willing buyer, with normal means of consideration, and with seller who are both
fully informed and motivated is called its:
a.Market Value.
b.Replacement Value.
c.Fundamental Value.
d.Fair Market Value.
When developing an ISMS, how many phases are there?
a.3.
b.4.
c.5.
d.6.
The FASB issues financial standards that are collectively known as:
a.Financial Accounting Standards.
b.Internal Revenue Code.
c.Audit Review Standards.
d.Generally Accepted Accounting Principles.
About half of all financial statement fraud crimes involve:
a.Understatement of liabilities.
b.Overstatement of capital.
c.Overstatement of assets and revenues.
d.Alteration of source documents.
What is Federal Information Processing Standard 140 (FIPS 140) and what does it
define?
Crimes covered under SOX have penalties that are raised from 5 to 20 years in prison.
What types of crimes are these called?
a.Blue Collar.
b.White Collar.
c.Racateering.
d.Associative.
If a businesses or its assets are going to be forced liquidated, what will happen to their
value?
a.It will be higher than normal sale conditions.
b.It will be lower than normal sale conditions.
c.It will be the same as normal sale conditions.
d.Assets cannot be forced to be liquidated.
What is typically one of the first signs that an individual’s identity has been stolen?
a.Unauthorized change in address.
b.Bill collectors begin calling for accounts the individual is not aware of.
c.Incorrect information appearing on credit reports.
d.Unauthorized charges appear on statements.
Within the interview process, explain the steps involved and if the interviews should
begin or end with those farthest away from the fraud.
What does good enterprise risk management do?
a.Helps management achieve its objectives relating to financial reporting objectives and
legal compliance.
b.Helps the SEC identify high fraud potential organizations.
c.Eliminates risk to investors by forcing corporations to maintain a fraud liability
sinking fund.
d.Assists industry analysts with a risk management reports.
What are some hindrances with the European legal systems when trying to stop
terrorism?
Contrast auditing approaches for cases of financial statement fraud versus other types of
fraud.
How many different chapters for bankruptcy are there?
a.2.
b.4.
c.6.
d.11.
What are tests of controls used for?
Which of the following is NOT a type of final question that would be asked to
non-suspects?
a. Confirm information received by the interviewer during the interview.
b. Obtain information that has not yet been gathered.
c.. Ask for assistance in confronting the fraudster.
d. Seek the subject’s agreement that he will continue to cooperate.
Instead of firing fraudster employees, what do some employers do?
a.Reassign them.
b.Provide them favorable recommendations to other jobs.
c. Give them a paid leave of absence.
d. Rehabilitate them.
In regards to daily deposits and reconciliations, the deposits should consist of:
a.Intact totals of both cash sales and money received from customers on account.
b.Intact totals from money received from customers, but not cash sales.
c.Intact totals from cash sales, but not money received from customers.
d.A total of all sales and cash receipts, less money used for petty cash.
What are some of the areas a forensic accountant should be knowledgeable in?
What is the most recognized fraud credential?
a.Certified Fraud Examiner (CFE).
b.Certified Public Accountant (CPA).
c.American Counsel of Accredited Business Accountants (ACABA).
d.Enrolled Agent (EA).
Which is one of the areas that the Sarbanes-Oxley Act of 2002 has made CEO’s rely on
forensic accountants heavily?
a.CEO’s must now certify their financial statements.
b.CFO’s must become qualified as forensic accountants.
c.To become a CEO in a public company, their personal financial records must be
certified by a forensic accountant.
d.Both a and b.
Why is a chain of custody important to maintain?
a.So that both the prosecution and defense can be assured that no one tampered with the
evidence.
b.So that the defense is aware of what detectives have worked on the case.
c.To prove to the jury that the evidence came from the victim.
d.all of the above.
Within the U.S. Federal Government, how do Inspector General’s operate?
a.They investigate possible fraud, independently of internal auditors.
b. They investigate possible fraud in conjunction with internal auditors.
c. They investigate only fraudulent situations that involve sexual harassment claims.
d. Inspector Generals have no authority or jurisdiction to investigate fraud.
Name some of the organizations that support forensic accounting:
Which of the following does Section 201 of Title II allow an auditing firm to perform
for their client?
a.Bookkeeping or other services related to the accounting records or financial
statements of the audit client.
b.Broker or dealer, investment adviser, or investment banking services.
c.Services (such as those relating to tax returns) not listed above to be provided
contemporaneously with audits.
d.Actuarial services.