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b.GAAP becoming outdated.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 to more restrictive rules after each
major accounting scandal.
d.Citizens forcing Congress to make more laws regulating the accounting industry.
What are some legitimate discretion choices that management can make?
Why must financial institutions file large currency transaction reports?
a.So bank auditors can ensure there is no fraud within the bank.
b.So that the IRS can ensure proper taxes are paid.
c.To help provide the link between the movement of money and people who supplied it.
d.To help fraud investigators perform their ratio analysis.
Besides a judge, what other person may issue a search warrant in certain jurisdictions?
a. District Attorney
b. Elected Sheriff
c. Magistrate
d. Grand Jury Foreman/woman
Where are the Federal statutory laws set forth?
a.U.S. Constitution.
b.Laws of Government.
c.United States Code.
d.U.S. Circuit Court.
How does SOX hope to prevent financial statement fraud?
a.Through hard penalties for management.
b.By having management sign the financial statements.
c.By prompting strong oversight and governance within the business.
d.All of the above.
Describe some of the nature of financial statement fraud.
Define the general process of valuating a business:
Once financial statement fraud is suspected, how should the fraud investigator proceed?
a.Call the district attorney to begin criminal proceedings.
b.Determine whether the financial statements agree with the general ledger balances.
c.Perform a Benford’s Law test.
d.Interview the accounting department staff.
What are the Labor Interest Arbitration methods? Describe them.
Both verbal and non-verbal responses to questions can be:
a. Indications of guilt
b. Admissions of guilt
c. Used to convict for fraud
d. Left up to interpretation by forensic psychologists.
Who are District Attorneys and what is their function within the court system?
What are the three steps of money laundering?
a.placement, layering, and integration.
b.acquisition, disbursement and concealment.
c.placement, disbursement and integration.
d.acquisition, layering and concealment.
After individuals become licensed in accounting, such as earning their CPA status, they
typically must do what?
a.Work for an auditing firm for 120 hours.
b.Continue their education by acquiring CPE’s.
c.Become an Enrolled Agent with the IRS.
d.Open a public practice in accounting.
What is the estimated amount of loss due to fraud in the U.S. every year?
a.Hundreds of thousands
b.Hundreds of millions
c.Hundreds of billions
d.Hundreds of trillions
What percentage of assets is typically involved in financial statement fraud?
a.5%.
b.10%.
c.25%.
d.50%.
What are five things that a forensic accountant can look for in a tax return that will lead
to the discovery of hidden assets?