Archives: Quiz

Explain some of the increased corporate responsibilities indicated in SOX. Who performs enforcement actions for insider trading? a.IRS. b.SEC. c.DHS. d.U.S. District Courts. Answer: b. Explain how a detection of fraud may not necessarily mean that fraud exists. Answer: The […]

The scheme involving recording fictitious sales and frequently includes falsified sales, inventory, and shipping records is called: a.Sham sales. b.Recognition of conditional sales. c.Improper cutoff of sales. d.Consignment sales. Why would a forensic accountant want to investigate all vendors listed […]

How much money does organized crime suck from the world economy every year? a.One million dollars. b.One billion dollars. c.One trillion dollars. d.An immeasurable amount. The Bill of Rights are: a.The first 10 Amendments to the U.S. Constitution. b.The Declaration […]

Beyond publishing findings of internal controls, fraud and misstatements, auditors must also publish findings on: a.Compliance with certain contractual agreements or regulatory requirements. b.Compliance with other auditors findings. c.Adherence to industry ratio standards. d.All of the above. Outline the different […]

Describe what rule making bodies are and provide an example of at least one of them. The SOX grew out of which of the following situations? a.FASB Statements being too overbearing. b.GAAP becoming outdated. c.The SEC and accounting professionals agreeing […]

What are the four types of evidence; explain each one. Discuss the benefits and detriments of recording an interview Answer: The general sources of evidence in fraud investigations include physical evidence, document evidence, observations, and interviews. Physical and Document Evidence: […]

Which mediation style doesn’t the mediator express opinions with respect to the facts of the case or the reasonableness of the participants’ negotiating positions? a.Facilitative. b.Evaluative. c.Participative. d.Arbitrational. Under the Market approach, what are assets valued at? Answer: Under the […]

Which of the following is NOT part of the fraud triangle? a.pressure/incentive. b.opportunity. c.financial distress. d.rationalization/attitude. Why are there no published professional protocols available to guide fraud investigators in conducting investigations for each specific type of fraud scheme? Answer: One […]

The Public Company Accounting Oversight Board has the power to do what? a.Enforce internal controls within auditing firms. b.Audit the firms who perform audits. c.Impose sanctions against auditing firms that fail to fulfill their professional responsibilities when auditing public companies. […]

How can a user fake their IP address? a.Through Spoofing. b.By using a packet sniffer. c.Through Spamming. d.All of the above. Describe the essential information contained in a signed confession Answer: While oral confessions are just as binding as are […]

SOX dramatically increased sentences for violators of the law. Discuss some of these penalties. Describe the phishing process. Answer: Phishing is a billion-dollar-a-year Internet scam in which fraudsters trick victims into supplying personal information. In one form of Phishing, the […]

Provide at least 5 reasons that ADR has advantages over litigation: Answer: ADR costs less than litigation. Court battles can be very expensive. Lawyers love to battle with each other, and cases can drag on for years. Moreover, litigation can […]

If a decision from a U.S. District Court is to be appealed, it will be heard in the: a.U.S. Supreme Court. b.State Supreme Court. c.U.S. Circuit Courts of Appeal. d.State Circuit Courts of Appeal. The general plan of organization for […]

Prior to trial, the prosecution or plaintiff may ask that the fraud be presented in _______ form. a.hierarchical b.linear c.laymen’s d.chronological What is the goal of labor racketeering? a.Control of labor health funds. b.Control of labor pension funds. c.Control of […]

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 […]

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 […]

When businesses or persons obtain mortgages for things other than real estate, these are called: a. Leins b. Chattel Mortgages c. Collateral Loans d. Uncollateralized Loans If a prosecutor and defense attorney are exchanging witness statements and other evidence, they […]

Tracing and vouching are opposite investigation techniques. Under the Daubert test, in order for a technique or theory to be called scientific, the technique or theory should have been published in peer-reviewed scientific journals. Data that is only logically deleted […]

The effects of potentially bad financial statements being used by business stakeholders is called risk and is the fundamental reason why audits are performed. Tip and fraud hotlines only help catch fraud. Answer: TRUE Interviewing skills are of paramount importance […]

There are typically more civil fraud convictions than criminal fraud convictions because criminal cases can require more effort on the part of the government due to the higher burden of proof that the government must bear in criminal cases (beyond […]

A qualifier modifies the meaning of a sentence so that the subject can make a truthful statement while, at the same time, provide an exception that often represents the opportunity to commit fraud or is an excuse for the subject’s […]

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. Answer: FALSE No synergy is when the assets of a business are sold as a group but […]

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. Answer: FALSE In the majority of cases, an IRS enforcement action for FSF […]

Which one of the following rates is used by brokerage firms as the basis for determining margin loan rates? A. discount B. Fed funds C. prime D. brokerage E. call money You own shares of AZT stock. Which of the […]

Over the past four years, Hi-Tech Development stock returned 35.2, 38.8, 18.4, and -32.2 percent annually. What is the arithmetic average return? A. 15.05 percent B. 17.67 percent C. 20.53 percent D. 24.20 percent E. 32.25 percent Which one of […]

Which one of the following terms is used to identify the evaluation method that determines the value of a stock by reviewing a firm’s financial statement in conjunction with other financial and economic information? A. technical analysis B. conceptual analysis […]

The spot rate on a non-dividend-paying stock is $42.30. The risk-free rate is 3.75 percent and the market rate is 11.50 percent. What is the three-month futures rate if spot-futures parity exists? A. $42.14 B. $42.54 C. $42.69 D. $42.82 […]

In the U.S., what percentage of the GDP is consumer spending? A. 45% B. 55% C. 65% D. 75% E. 85% Which one of the following options is out-of-the-money? A. call with a $20 strike and a stock price of […]

Sugar Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends. The remaining $158,000 will be shown in which account on the firm’s financial statements for next year? A. long-term debt B. common stock […]

Which one of the following is the key function of GNMA? A. providing direct financing for first-time home buyers only B. directly refinancing existing home mortgages C. providing mortgage funds to military personnel only D. providing direct financing to first-time […]

The yield that a bond will earn given that it is bought back by the issuer at the earliest possible date is the: A. market yield. B. current yield. C. yield to maturity. D. yield to put. E. yield to […]

Which of the following are impediments to the correction of a security’s mispricing? I. sentiment-based risk II. implementation costs III. firm-specific risk IV. noise trader risk A. II only B. II and IV only C. I, III, and IV only […]

A bond has a current yield that is equal to the yield-to-maturity. Given this, which one of the following must also be true? A. The bond must pay annual interest. B. The maturity value must be greater than the bond […]

Which one of the following is the type of risk that affects a large number of assets? A. unique B. systematic C. asset-specific D. unsystematic E. firm-specific Which of the following interest rates is directly controlled by the Federal Reserve? […]

You bought a put with a strike price of $25. The current stock price is $23. What is the current payoff value of this option? A. -$2 B. -$1 C. $0 D. $1 E. $2 Over the past 5 days, […]

Which one of the following trading symbols is associated with the ETF on the S&P 500 index? A. DIA B. QQQQ C. SPY D. SPX E. DIAX PT Boats plans to pay a $2.25 a share dividend at the end […]

A frequency distribution, which is completely defined by its average (mean) and standard deviation, is referred to as a(n): A. normal distribution. B. variance distribution. C. expected rate of return. D. average geometric return. E. average arithmetic return. What is […]

Which one of the following is the risk associated with receiving a mortgage bond’s principal payments sooner than anticipated? A. prepayment risk B. default risk C. amortized risk D. market risk E. seasoned risk You combine a set of assets […]

A basic bond that has a face value of $1,000 and pays regular semiannual coupon payments is referred to as which one of the following? A. pure discount bond B. premium bond C. inflation bond D. straight bond E. conversion […]

The concept that well-capitalized, rational traders may be unable to correct a mispricing defines which one of the following terms? A. noise trading bounds B. market bounds C. limits to arbitrage D. implementation limits E. sentiment borders A Treasury bill […]

Which one of the following is defined as the market value of goods and services produced over a period of time? A. Domestic Market Product (DMP) B. Gross Domestic Product (GDP) C. Gross Economic Activity (GEA) D. Gross Market Value […]

A 12b-1 fee is a fee charged by a mutual fund: A. at the time shares are issued. B. if shares are sold within a stated period of time. C. to cover trading costs. D. to pay the fund’s managers. […]

Which of the following affect the earnings per share? I. decrease in interest expense II. share repurchase III. increase in tax rates IV. preferred stock dividend A. I and III only B. II and IV only C. I, II, and […]

For the period 1926-2012, long-term government bonds had an average return that ______ the average return on long-term corporate bonds while having a standard deviation that _______ the standard deviation of the long-term corporate bonds. A. exceeded; was less than […]

Rudolfo purchased 900 shares of stock for $62.20 a share and sold them ten months later for $64.60 a share. The initial margin requirement on this stock is 75 percent and the maintenance margin is 40 percent. Ignoring dividends and […]

Over the past 5 years, DL Insulation has paid annual dividends of $1.40, $1.55, $1.70, $1.73, and $1.77 per share. What is the geometric average dividend growth rate for this period? A. 4.80 percent B. 5.79 percent C. 5.88 percent […]

Which one of the following best describes a real interest rate? A. current rate on a U.S. Treasury bill B. nominal rate minus the risk-premium on an individual security C. market return minus the risk-free rate D. nominal rate minus […]

What is the beta of a portfolio which consists of the following? A. 1.18 B. 1.22 C. 1.23 D. 1.32 E. 1.37 A “block trade” is a trade in excess of how many shares? A. 1,000 B. 5,000 C. 10,000 […]

The sustainable growth rate is equal to: A. ROE (1 – Payout ratio). B. ROA (1 – Payout ratio). C. ROE (1 – Retention ratio). D. ROA (1 – Retention ratio). E. ROE ROA. You open a margin account with […]

Which of the following reflects the value of economic output adjusted to remove the effects of inflation? A. current year GDP B. real GDP C. nominal GDP D. adjusted GDP E. actual GDP A 6-month put has a strike price […]