Fraudulent conveyances typically involved unqualified persons offering fee-based
financial advice, credit counseling, and bankruptcy-filing services.
Forensic Accounting is a part of Fraud investigation.
No synergy is when the assets of a business are sold as a group but not as part of an
assumed going concern.
Accounting Information Systems (AISs) are so simple that accountants never need to
work with their components, called business processes.
With the facilitative mediation style, the mediator express opinions with respect to the
facts of the case and the reasonableness of the participants’ negotiating positions.
There is a Constitutional Amendment that requires law enforcement to investigate all
fraud allegations.
A difference between an interview and an interrogation is the Miranda rights being read.
Organized crime is a global problem that sucks over a trillion dollars a year out of the
legitimate world economy.
The argument that income tax is a direct tax and should be apportioned to the states is a
true argument and is supported by the sixteenth amendment.
Forensic Accountants may become a part of other forensic science specialties.
A fraud investigation report can sometimes be more helpful in ruling out fraud than in
ruling it in.
The three element of the fraud triangle are pressure, opportunity, and manipulation.
Controls in manual systems will be exactly the same as controls in computer-based
systems.
A technique to solve conflict during ADR is to rent a judge and rent a jury.
Investigation risk is the risk of making less-than-optimal decisions in deciding what
evidence to collect, and how to collect it, and how to interpret it.
The investigator should start with the suspect first, then interview outward.
Forensic accountants should be familiar with computer forensic procedures.
The fraud investigators report should be constructed for insurance claim purposes, not
to withstand a court trial.
Computer files are not considered document evidence because they do not exist
physically.
Alternative Dispute Resolution has some distinct disadvantages over litigation such as
higher costs and public access to the proceedings.
It is possible to hold credentials as a forensic accountant.
Fraud investigations can be time consuming and expensive.
Some tax protestors argue that the IRS is a private corporation in Delaware or an
agency of the Puerto Rican government.
Some of the Certified Information Systems Security Professionals criteria are; Access
Control Systems & Methodology, Applications & Systems Development, Business
Continuity Planning, Cryptography, Law, Investigation & Ethics, Operations Security.
On every audit, the auditor is required to assess the ability of the audited entity to
continue to operate for a period not to exceed one year from the balance sheet date.
Investment value is normally determined by analytical methods that seek to find the
“true value” or the “underlying value” of an asset.
Forensic accountants serve one primary role as experts in forensic matters: as expert
witnesses.
A Motions in Limine a request from the defendant to exclude some evidence that may
be introduced during the trial.
All auditors are regulated by the SEC as given authority by SOX 2002.
To date, there are only two forensic accounting organizations in the world.
Within the organization, the internal auditor has the responsibility of actively
monitoring compliance with policies and behavior relating to internal control.
There is no one right way to value an asset, and in many cases the process of assigning
a single dollar value to a complex asset is as much art as it is science, although this is
not something that many valuation specialists are likely to tell all their clients.
The auditor’s objective is to determine whether the financial statements are free of
material misstatement, whether from error or fraud.
The basis for net worth calculations is:
a. Net Worth= Gross Pay ” Tax Liabilities
b. Current Debt ” Cash on hand
c. Assets= Liabilities ” Owner’s Equity
d. Assets = Liabilities + Owner’s Equity
Expressing _________ with the subject can make confessing easier.
a. Justification
b. Disappointment
c. Empathy
d. Sympathy
Which of the following is an advantage of Alternative Dispute Resolution over
litigation?
a.Court battles can be very expensive.
b.Many companies would prefer not to air their problems in public courtrooms.
c.Litigation often embitters the participants, but in many cases ADR mediation can
actually help build business relationships.
d.All of the above.
State Constitutional laws are considered supreme laws unless:
a.The burden of proof is not meet.
b.There are local laws that are violated.
c.The case is a criminal case.
d.The State laws are in conflict with the U.S. Constitution.
How is the American Society of Appraisers (ASA) different from the Appraisal
Foundation?
a.The ASA is a governmental agency and the Appraisal Foundation is a private
organization.
b.The ASA is a private organization and the Appraisal Foundation is a governmental
agency.
c.The ASA accepts individuals whereas the Appraisal Foundation only accepts affiliate
organizations.
d.The ASA only accepts affiliate organizations whereas the Appraisal Foundation
accepts individuals.
Ethics and corporate culture, management philosophy and operating style and an
effective and independent audit committee are all part of which internal control
component?
a.Information and communication.
b.Monitoring.
c.Control activities.
d.Control environment.
What are the penalties under 18 USC 1001 for any person who willfully falsifies,
conceals, or covers up information or who makes any materially false, fictitious, or
fraudulent statement, representation, or makes any document that contains any
materially false, fictitious, or fraudulent statement or entry?
a.$25,000 for individuals and $50,000 for corporations.
b.$250,000 for individuals and $500,000 for corporations.
c.$25,000 for corporations and $50,000 for individuals.
d.$250,000 for corporations and $500,000 for individuals.
Management’s routine use of non-fraudulent accounting and economic discretion to
smooth earnings is called:
a.Financial manipulation.
b.Earnings management.
c.Corporate financial management.
d.Asset management.
Why is trying to catch identity thieves in the act not generally helpful?
a.They lie so well that you cannot know their true identity.
b.Only amateur identity thieves are sloppy enough to get caught in the act.
c.Immediate arrests don’t normally take place unless a law-enforcement officer happens
to be at the scene of the crime.
d.All of the above.
Which of the following can be the most important part of most investigations?
a. Interviews
b. Interrogations
c. Financial Statement ratio analysis
d. Both A and B
To whom do the rules within SOX apply to?
a.Corporations.
b.Partnerships with more than 10 partners.
c.Any Corporation required to file a 10-K with the SEC.
d.All of the above.
Business valuators that have the most credibility will have:
a.A college education.
b.Credentials from national or international organizations.
c.Years of experience.
d.All of the above.
Why would some loss prevention measures not be worth implementation?
a.Some corporations have poor internal control policies and implementation of some
loss prevention measures would notify employees of these poor controls.
b.The IRS does not allow deductions for loss prevention measures.
c.Only court ordered loss prevention measures can me implemented.
d.Some measures, such as excessively tight security to prevent shoplifting, would cost
more in sales and manpower costs than would save in shoplifters being caught.
Made men are at least 50% Italian, on their mother’s side of the family, and meet certain
other criteria.
For divorce cases, why might the level of scrutiny be considerably less that in
bankruptcy cases?
a.Divorce attorneys don’t always have the financial expertise that many bankruptcy
attorneys have.
b.In bankruptcy cases there tend to be creditors with experience in asset concealment,
and who are in possession of information-rich credit applications from debtors.
c.In bankruptcy cases there is more of a tendency for fraudulent conveyances and the
hiding of assets to take place immediately prior to the filing.
d.All of the above.
If the investigator is attempting to prove that a given fraud theory is correct but also
attempting to prove that it is not correct, he is engaging in:
a.Double Jeopardy
b. Proving beyond a reasonable doubt
c. Double crossing
d.Reverse proof
The auditor communicates his or her conclusions by issuing a(n)
a.Auditors Statement.
b.Certificate of Assurance.
c.Audit Report.
d.White Paper of Findings.
Which of the following is a means of settling out of court?
a.Arbitration.
b.Mediation.
c.Deliberation.
d.Both a and b.
How many steps are there in the fraud investigation process?
a. 1
b. 2
c. 3
d.4
What does a packet sniffer do?
a.It replicates data being transmitted across the network to increase network speed.
b.It copies certain types of data packets and stores them for later use.
c.It finds E-mail programs and forces it to replicate false e-mails from a specific user.
d.It manipulates a computer into spreading viruses.
How are the numbers for the numbers game derived?
a.From an unpredictable financial figure that is published daily in the newspaper.
b.From the State gambling authority.
c.From the head of the local organized crime organization.
d.Through a complex mathematical formula.
Unauthorized purchases, misappropriation of petty cash and abuse of company credit
cards are all examples of:
a.Accounts receivable fraud.
b.Expenditure cycle fraud.
c.Custodial theft of money.
d.Lapping of accounts receivables.
Attorney’s may ask leading questions:
a.On direct examination but not cross examination.
b.On cross examination but not direct examination.
c.On both direct and cross examination.
d.On neither direct nor cross examination.
Fraud theory is:
a. Fraudster, circumstances, motive and opportunity
b. The details surrounding crime and punishment
c. Where, why, with whom, opportunity and fraud
d.Who, what, when, where, why, how
Which of the following does a Criminalist do?
a.Find evidence at a crime scene.
b.Preserve evidence at a crime scene.
c.Collect evidence at a crime scene.
d.All of the above.
ERM stands for:
a.Electronic Risk Measurements.
b. Environmentally Resilient Management
c. Enabled Rick Management.
d.Enterprise Risk Management.
By non-disclosure of bad news, management has:
a.Protected the company from bad stock valuation on the market.
b.Saved investors the embarrassment of holding declining stock.
c.Let those who have purchased stock on the market pay a higher price than they should
have.
d.All of the above.
If someone is applying science to legal matters, they are practicing;
a.Forensic Accounting.
b.Forensic Science.
c.Forensic Law.
d.Forensic Engineering.
An experts opinion can be combined with evidence to provide a(n):
a. Conviction
b. Arrest Warrant
c. Loss claim
d.Picture of fraud
Who is financial statement fraud harmful to?
a.Investors.
b.Markets.
c.Society.
d.All of the above.
How are the professional fees typically billed during an investigation?
a. Weekly
b. As a percentage of potential fraud prevented.
c. When there has been an arrest.
d.Monthly
What is the monetary definition of “substantial” in regards to the amount of money
evaded to pay tax upon?
a.$100,000.
b.$250,000.
c.$1,000,000.
d.The IRS has not defined the monetary value associated with the word “substantial”.
To establish forensic identification, the points of comparison for the suspect must
a.Possess the same physical characteristics.
b.Be confirmed by a second independent forensic scientist.
c.Uniquely correspond with those of the person who committed the crime.
d.Contain DNA samples of the person who committed the crime.
Misrepresentation is the act of presenting oneself in a manner that does not agree with
reality. What does “presenting” mean?
a.Actions, statements, or omissions.
b.Words, court judgments or opinions.
c.Appearance, style or function.
d.Both a and b.
Which of the following is NOT a kind of question asked during an interview?
a. Introductory
b. Informational
c. Leading
d. Admission-seeking
What is the main tool that the FBI has used to investigate and prosecute organized
crime?
a.Foreign Intelligence Surveillance Act.
b.Racketeer Influenced and Corrupt Organization Statute.
c.Pfizer Court Proceedings.
d.Patriot Act.
What is the fundamental concept behind Islamic radicalism?
Explain the Personal Knowledge Rule and how expert witnesses are exempt from it.
What are the seven evidence gathering procedures?
Who administers bankruptcy proceedings?
a.Lawyers
b.U.S. District Courts.
c.Department of Justice.
d.U.S. Attorney’s Office.
How are loan applications helpful in the asset discovery process?
What are some consequences to companies and their managers for financial statement
fraud?
For paper or any perishable documents, the forensic accountant should follow what
basic rules?
Which of the following is NOT a way that fraud is usually detected?
a.Tips and hotlines.
b.Admission by the guilty party.
c.Financial Statement Audits.
d.By accident.
Normally, how many interviewers should be present?
a. Two or more
b. 1
c. 2
d. As many as the firm can afford.
Describe the importance of the order in which multiple persons are to be interviewed
Explain how involuntary bankruptcy can occur and give an example of how it can be
abused.
How many types of evidence are there?
a.2.
b.4.
c.6.
d.8.
Explain how the ISO promulgates standards in “families” and what that means.