Forensic Accounting and Fraud Examination, 2nd Edition Test Bank
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-1
Chapter 01
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. 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.
Difficulty: Easy
2. 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.
Difficulty: Moderate
3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
1-1
Chapter 01
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. 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.
Difficulty: Easy
2. 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.
Difficulty: Moderate
3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-1
Chapter 01
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. 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.
Difficulty: Easy
2. 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.
Difficulty: Moderate
3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
1-1
Chapter 01
Introduction to Forensic Accounting and Fraud Examination
Multiple Choice Questions
1. 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.
Difficulty: Easy
2. 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.
Difficulty: Moderate
3. Which of the following does a forensic accountant investigate?
a. Purchases of Businesses.
b. Valuation of divorce assets.
c. Calculation of lost profits.
D. All of the above.
Difficulty: Easy
Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-2
4. Which of the following two are types of auditors?
A. External and Internal
b. Internal and Forensic
c. Forensic and International
d. External and Forensic
Difficulty: Easy
5. Forensic accounting can be broken into how many categories?
A. Two: Investigative and Litigation.
b. Two: Internal and External.
c. Three: Investigative, External, Preventative.
d. Three: Internal, Litigation, Certified.
Difficulty: Moderate
6. What is one of the primary differences between a Financial Statement auditor and a
Forensic Accountant?
a. Financial statement auditors are likely to follow leads suggested by immaterial items
whereas Forensic Accountants often must restrict their efforts to searching for material
misstatements.
B. Forensic Accountants are likely to follow leads suggested by immaterial items whereas
financial statement auditors often must restrict their efforts to searching for material
misstatements.
c. Forensic Accountants must focus on specific legal areas that produce fraud charges under
the courts of law whereas financial statement auditors focus their attention on the Generally
Accepted Accounting Principles.
d. Forensic Accountants are likely to ask individuals to fix discrepancies found in financial
statements whereas financial statement auditors will fail a corporations financial statement
certification, therefore having repercussions with the SEC.
Difficulty: Hard
1-2
4. Which of the following two are types of auditors?
A. External and Internal
b. Internal and Forensic
c. Forensic and International
d. External and Forensic
Difficulty: Easy
5. Forensic accounting can be broken into how many categories?
A. Two: Investigative and Litigation.
b. Two: Internal and External.
c. Three: Investigative, External, Preventative.
d. Three: Internal, Litigation, Certified.
Difficulty: Moderate
6. What is one of the primary differences between a Financial Statement auditor and a
Forensic Accountant?
a. Financial statement auditors are likely to follow leads suggested by immaterial items
whereas Forensic Accountants often must restrict their efforts to searching for material
misstatements.
B. Forensic Accountants are likely to follow leads suggested by immaterial items whereas
financial statement auditors often must restrict their efforts to searching for material
misstatements.
c. Forensic Accountants must focus on specific legal areas that produce fraud charges under
the courts of law whereas financial statement auditors focus their attention on the Generally
Accepted Accounting Principles.
d. Forensic Accountants are likely to ask individuals to fix discrepancies found in financial
statements whereas financial statement auditors will fail a corporations financial statement
certification, therefore having repercussions with the SEC.
Difficulty: Hard
Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
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7. Which of the following is not a skill needed by a Forensic Accountant?
a. Auditing Skills.
b. Criminology.
C. Sociology.
d. Information Technology.
Difficulty: Moderate
8. Which of the following events have made the Forensic Accounting industry more popular
recently?
a. Corporate Scandals.
b. Sarbanes-Oxley Act of 2002.
c. Crime Dramas on Television.
D. Both a and b.
Difficulty: Easy
9. 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.
Difficulty: Moderate
10. According to the 2002 Report to the Nation on Occupational Fraud and Abuse, what
percentage of corporate revenues were lost in that year to fraud?
a. 2%.
b. 4%.
C. 5%.
d. 8%.
Difficulty: Moderate
1-3
7. Which of the following is not a skill needed by a Forensic Accountant?
a. Auditing Skills.
b. Criminology.
C. Sociology.
d. Information Technology.
Difficulty: Moderate
8. Which of the following events have made the Forensic Accounting industry more popular
recently?
a. Corporate Scandals.
b. Sarbanes-Oxley Act of 2002.
c. Crime Dramas on Television.
D. Both a and b.
Difficulty: Easy
9. 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.
Difficulty: Moderate
10. According to the 2002 Report to the Nation on Occupational Fraud and Abuse, what
percentage of corporate revenues were lost in that year to fraud?
a. 2%.
b. 4%.
C. 5%.
d. 8%.
Difficulty: Moderate
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
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11. 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.
Difficulty: Easy
12. 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).
Difficulty: Moderate
13. 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.
Difficulty: Easy
14. Who was the founder of the Association of Certified fraud Examiners?
a. The 187th Congress of the United States.
b. President Bill Clinton.
C. Joseph Wells.
d. All of the above worked together to form the ACFE.
Difficulty: Moderate
1-4
11. 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.
Difficulty: Easy
12. 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).
Difficulty: Moderate
13. 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.
Difficulty: Easy
14. Who was the founder of the Association of Certified fraud Examiners?
a. The 187th Congress of the United States.
b. President Bill Clinton.
C. Joseph Wells.
d. All of the above worked together to form the ACFE.
Difficulty: Moderate
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
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15. Which of the following is NOT a way to become a Certified Fraud Specialist (CFS)?
a. Successfully completing a multipart examination that covers the detection, deterrence,
investigation, and prosecution of white-collar crime.
B. A bachelor's degree in business or ten years of accounting-related experience and pass the
two parts of the Certified Fraud Specialist examination.
c. Completing the ACFS Academy core courses and taking an examination at the end of each
course.
d. Being grandfathered in by means of submitting information on the experience and
education.
Difficulty: Hard
16. What is the mission of the Association of Certified Fraud Specialists (ACFS)?
a. To encourage CPAs to report potential areas that a Forensic Accountant should be used
within.
b. To pre-screen potential Forensic Accountants who would make good FBI agents.
C. To encourage its members to offer pro-bono service to the communities in which its
members reside.
d. All of the above are part of the ACFS's mission.
Difficulty: Moderate
17. 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.
Difficulty: Moderate
1-5
15. Which of the following is NOT a way to become a Certified Fraud Specialist (CFS)?
a. Successfully completing a multipart examination that covers the detection, deterrence,
investigation, and prosecution of white-collar crime.
B. A bachelor's degree in business or ten years of accounting-related experience and pass the
two parts of the Certified Fraud Specialist examination.
c. Completing the ACFS Academy core courses and taking an examination at the end of each
course.
d. Being grandfathered in by means of submitting information on the experience and
education.
Difficulty: Hard
16. What is the mission of the Association of Certified Fraud Specialists (ACFS)?
a. To encourage CPAs to report potential areas that a Forensic Accountant should be used
within.
b. To pre-screen potential Forensic Accountants who would make good FBI agents.
C. To encourage its members to offer pro-bono service to the communities in which its
members reside.
d. All of the above are part of the ACFS's mission.
Difficulty: Moderate
17. 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.
Difficulty: Moderate
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
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18. If you are a CPA 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.
Difficulty: Moderate
19. If you are experienced in the valuation field 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.
Difficulty: Moderate
20. 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.
Difficulty: Moderate
21. 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.
Difficulty: Moderate
1-6
18. If you are a CPA 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.
Difficulty: Moderate
19. If you are experienced in the valuation field 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.
Difficulty: Moderate
20. 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.
Difficulty: Moderate
21. 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.
Difficulty: Moderate
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-7
22. The Institute of Business Appraisers (IBA) supports the valuating of which type of
businesses?
a. Public Corporations.
b. Private Corporations.
C. Closely-held Businesses.
d. Non-Profit Organizations.
Difficulty: Moderate
23. The Institute of Business Appraisers offers which certification?
a. CPA.
B. CBA.
c. AICPA.
d. EA.
Difficulty: Easy
24. In which way does the AICPA support Forensic Accountants?
a. Through its Forensic Accountants division.
B. Through its Business Valuation and Forensic & Litigation Services section.
c. Through its credentialing of Forensic Accountants.
d. The AICPA does not support Forensic Accountants.
Difficulty: Moderate
25. What credential does the AICPA offer?
A. Accredited in Business Valuation.
b. Accredited Business Accountant.
c. Forensic Accountant Accreditation.
d. Accounting for Forensic and Litigation.
Difficulty: Moderate
1-7
22. The Institute of Business Appraisers (IBA) supports the valuating of which type of
businesses?
a. Public Corporations.
b. Private Corporations.
C. Closely-held Businesses.
d. Non-Profit Organizations.
Difficulty: Moderate
23. The Institute of Business Appraisers offers which certification?
a. CPA.
B. CBA.
c. AICPA.
d. EA.
Difficulty: Easy
24. In which way does the AICPA support Forensic Accountants?
a. Through its Forensic Accountants division.
B. Through its Business Valuation and Forensic & Litigation Services section.
c. Through its credentialing of Forensic Accountants.
d. The AICPA does not support Forensic Accountants.
Difficulty: Moderate
25. What credential does the AICPA offer?
A. Accredited in Business Valuation.
b. Accredited Business Accountant.
c. Forensic Accountant Accreditation.
d. Accounting for Forensic and Litigation.
Difficulty: Moderate
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-8
26. How does forensic accounting differs from other types of accounting?
a. It is a separate field that has no relation to accounting.
b. Forensic Accountants require at least an masters in accounting.
C. Forensic Accountants are more likely to be found dissecting these statements and obtaining
evidence from other sources.
d. General Accountants must hold to subjective evidence whereas forensic accountants must
use objective evidence.
Difficulty: Moderate
27. What is Defalcation?
a. The ruling of a judge to restore the assets wrongfully taken to their rightful owner.
b. The act of conspiring to commit perjury.
c. The process of finding stolen assets through financial statement analysis.
D. The appropriation of assets for the benefit of those who do not rightfully deserve them.
Difficulty: Moderate
28. What are litigation services?
a. It is another term for a law firm.
b. It is a specialized branch of forensic accounting.
C. It is the service provided to the courts to determine an equitable judgment.
d. It is an out of court settlement service for corporations.
Difficulty: Moderate
29. You are attempting to get two parties to compromise on a situation. This means that you
are engaged in:
a. Litigation.
B. Mediation.
c. Plea Bargaining.
d. Grand Jury testimony.
Difficulty: Easy
1-8
26. How does forensic accounting differs from other types of accounting?
a. It is a separate field that has no relation to accounting.
b. Forensic Accountants require at least an masters in accounting.
C. Forensic Accountants are more likely to be found dissecting these statements and obtaining
evidence from other sources.
d. General Accountants must hold to subjective evidence whereas forensic accountants must
use objective evidence.
Difficulty: Moderate
27. What is Defalcation?
a. The ruling of a judge to restore the assets wrongfully taken to their rightful owner.
b. The act of conspiring to commit perjury.
c. The process of finding stolen assets through financial statement analysis.
D. The appropriation of assets for the benefit of those who do not rightfully deserve them.
Difficulty: Moderate
28. What are litigation services?
a. It is another term for a law firm.
b. It is a specialized branch of forensic accounting.
C. It is the service provided to the courts to determine an equitable judgment.
d. It is an out of court settlement service for corporations.
Difficulty: Moderate
29. You are attempting to get two parties to compromise on a situation. This means that you
are engaged in:
a. Litigation.
B. Mediation.
c. Plea Bargaining.
d. Grand Jury testimony.
Difficulty: Easy
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-9
30. 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.
Difficulty: Moderate
True / False Questions
31. Forensic Accounting is a part of Fraud investigation.
FALSE
Difficulty: Moderate
32. Forensic Accounting does not greatly differ from traditional accounting.
FALSE
Difficulty: Easy
33. Some forensic accountants perform investigations much like financial private
investigators.
TRUE
Difficulty: Moderate
34. Internal Auditors are individuals from outside CPA firms that come into your business to
perform an audit.
FALSE
Difficulty: Easy
1-9
30. 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.
Difficulty: Moderate
True / False Questions
31. Forensic Accounting is a part of Fraud investigation.
FALSE
Difficulty: Moderate
32. Forensic Accounting does not greatly differ from traditional accounting.
FALSE
Difficulty: Easy
33. Some forensic accountants perform investigations much like financial private
investigators.
TRUE
Difficulty: Moderate
34. Internal Auditors are individuals from outside CPA firms that come into your business to
perform an audit.
FALSE
Difficulty: Easy
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-10
35. Investigative services that may or may not lead to courtroom testimony.
TRUE
Difficulty: Moderate
36. Errors are always an indication of intentional fraud.
FALSE
Difficulty: Moderate
37. Due to the Sarbanes-Oxley Act of 2002, CEO's no longer have to sign their financial
statements.
FALSE
Difficulty: Easy
38. Governmental agencies never use forensic accountants.
FALSE
Difficulty: Easy
39. To date, there are only two forensic accounting organizations in the world.
FALSE
Difficulty: Moderate
40. It is possible to hold credentials as a forensic accountant.
TRUE
Difficulty: Easy
1-10
35. Investigative services that may or may not lead to courtroom testimony.
TRUE
Difficulty: Moderate
36. Errors are always an indication of intentional fraud.
FALSE
Difficulty: Moderate
37. Due to the Sarbanes-Oxley Act of 2002, CEO's no longer have to sign their financial
statements.
FALSE
Difficulty: Easy
38. Governmental agencies never use forensic accountants.
FALSE
Difficulty: Easy
39. To date, there are only two forensic accounting organizations in the world.
FALSE
Difficulty: Moderate
40. It is possible to hold credentials as a forensic accountant.
TRUE
Difficulty: Easy
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
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Essay Questions
41. Describe how a forensic accountant would employ his or her skills?
Forensic accounting is 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. Notice
that forensic accounting is not limited to the use of financial investigations that result in legal
prosecution; the investigation and analysis must, however, meet the standards required in the
court of law that has jurisdiction.
Difficulty: Moderate
42. Compare and contrast the usage of internal versus external auditors.
Internal auditing is the process by which a company's operations are verified by employees of
the company known as internal auditors. Internal auditors may also be involved in collecting
and evaluating information to assist in determining whether operations should be changed.
Conversely, External auditors are not employees of the company; they are auditors (licensed
by the state in which they practice who have passed the Certified Public Accountant
examination or, if a Chartered Accountants, have passed the Chartered Accountant
examination and are licensed by the country in which they practice) hired to determine
whether the financial statements of the company fairly present, in all material respects,
financial position, results of operations, and cash flows in accordance with specified criteria
(usually generally accepted accounting principles).
Difficulty: Moderate
43. How is defalcation different from misrepresentation?
The appropriation of assets for the benefit of those who do not rightfully deserve them,
whereas the act of presenting oneself in a manner that does not agree with reality.
Difficulty: Hard
1-11
Essay Questions
41. Describe how a forensic accountant would employ his or her skills?
Forensic accounting is 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. Notice
that forensic accounting is not limited to the use of financial investigations that result in legal
prosecution; the investigation and analysis must, however, meet the standards required in the
court of law that has jurisdiction.
Difficulty: Moderate
42. Compare and contrast the usage of internal versus external auditors.
Internal auditing is the process by which a company's operations are verified by employees of
the company known as internal auditors. Internal auditors may also be involved in collecting
and evaluating information to assist in determining whether operations should be changed.
Conversely, External auditors are not employees of the company; they are auditors (licensed
by the state in which they practice who have passed the Certified Public Accountant
examination or, if a Chartered Accountants, have passed the Chartered Accountant
examination and are licensed by the country in which they practice) hired to determine
whether the financial statements of the company fairly present, in all material respects,
financial position, results of operations, and cash flows in accordance with specified criteria
(usually generally accepted accounting principles).
Difficulty: Moderate
43. How is defalcation different from misrepresentation?
The appropriation of assets for the benefit of those who do not rightfully deserve them,
whereas the act of presenting oneself in a manner that does not agree with reality.
Difficulty: Hard
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-12
44. What are some of the special skills that a forensic accountant might use in their trade?
Forensic accountants apply special skills in accounting, auditing, finance, quantitative
methods, certain areas of the law, research, and investigative skills to collect, analyze, and
evaluate evidential matter and to interpret and communicate findings.
Difficulty: Moderate
45. What are some of the areas a forensic accountant should be knowledgeable in?
Auditing, Investigative, Criminology, Accounting, Legal, Information technology (IT) and
Communication.
Difficulty: Moderate
46. In what sectors of our economy can forensic accountants find work?
Forensic accountants can be employed in all types of businesses including: Public/private
corporations, closely held businesses, non-profits and Federal, State, County and Local
governments.
Difficulty: Easy
47. Even if a case does not go to court, a forensic accountant might be called upon to assist
during what two types of situations (define both)?
Mediation and arbitration. Mediation is assisting parties with differing perspectives to arrive
at a compromise. Arbitration is a hearing and deciding a case that involves parties that have
taken different positions.
Difficulty: Hard
1-12
44. What are some of the special skills that a forensic accountant might use in their trade?
Forensic accountants apply special skills in accounting, auditing, finance, quantitative
methods, certain areas of the law, research, and investigative skills to collect, analyze, and
evaluate evidential matter and to interpret and communicate findings.
Difficulty: Moderate
45. What are some of the areas a forensic accountant should be knowledgeable in?
Auditing, Investigative, Criminology, Accounting, Legal, Information technology (IT) and
Communication.
Difficulty: Moderate
46. In what sectors of our economy can forensic accountants find work?
Forensic accountants can be employed in all types of businesses including: Public/private
corporations, closely held businesses, non-profits and Federal, State, County and Local
governments.
Difficulty: Easy
47. Even if a case does not go to court, a forensic accountant might be called upon to assist
during what two types of situations (define both)?
Mediation and arbitration. Mediation is assisting parties with differing perspectives to arrive
at a compromise. Arbitration is a hearing and deciding a case that involves parties that have
taken different positions.
Difficulty: Hard
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Chapter 01 - Introduction to Forensic Accounting and Fraud Examination
1-13
48. Name some of the organizations that support forensic accounting:
The Association of Certified Fraud Examiners, the American College of Forensic Examiners,
the Association of Certified Fraud Specialists, the National Association of Certified Valuation
Analysts, the National Litigation Support Services Association, the Institute of Business
Appraisers, and the American Institute of Certified Public Accountants.
Difficulty: Easy
49. What does credentialing mean?
Some of the organizations that support forensic accounting will evaluate the forensic
accountant’s knowledge and experience based upon education, time in the field and written
examinations. These organizations will then issue a credential based upon these criteria. This
is similar to the CPA credential.
Difficulty: Moderate
50. What was one of the biggest changes in the SOX of 2002 that increased the usage of
forensic accountants?
CEO's now had to personally sign the financial statements and could personally be held liable
for any fraud within those statements.
Difficulty: Easy
1-13
48. Name some of the organizations that support forensic accounting:
The Association of Certified Fraud Examiners, the American College of Forensic Examiners,
the Association of Certified Fraud Specialists, the National Association of Certified Valuation
Analysts, the National Litigation Support Services Association, the Institute of Business
Appraisers, and the American Institute of Certified Public Accountants.
Difficulty: Easy
49. What does credentialing mean?
Some of the organizations that support forensic accounting will evaluate the forensic
accountant’s knowledge and experience based upon education, time in the field and written
examinations. These organizations will then issue a credential based upon these criteria. This
is similar to the CPA credential.
Difficulty: Moderate
50. What was one of the biggest changes in the SOX of 2002 that increased the usage of
forensic accountants?
CEO's now had to personally sign the financial statements and could personally be held liable
for any fraud within those statements.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-1
Chapter 02
The Forensic Accounting Legal Environment
Multiple Choice Questions
1. In most cases, the penalties of monetary damages or equitable relief are awarded in which
type of case?
A. Civil.
b. Criminal.
c. Grand Jury.
d. Disposition.
Difficulty: Easy
2. Whom does the burden of proof fall upon?
a. Defense.
B. Plaintiff.
c. Jury.
d. Investigators.
Difficulty: Easy
3. 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.
Difficulty: Moderate
2-1
Chapter 02
The Forensic Accounting Legal Environment
Multiple Choice Questions
1. In most cases, the penalties of monetary damages or equitable relief are awarded in which
type of case?
A. Civil.
b. Criminal.
c. Grand Jury.
d. Disposition.
Difficulty: Easy
2. Whom does the burden of proof fall upon?
a. Defense.
B. Plaintiff.
c. Jury.
d. Investigators.
Difficulty: Easy
3. 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.
Difficulty: Moderate
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Chapter 02 - The Forensic Accounting Legal Environment
2-2
4. 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.
Difficulty: Moderate
5. The Bill of Rights are:
A. The first 10 Amendments to the U.S. Constitution.
b. The Declaration of Independence.
c. The 10 Commandments.
d. The rules of conduct for the courtroom.
Difficulty: Easy
6. 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.
Difficulty: Moderate
7. Who has the sole discretion to bring charges in any case?
a. Investigator.
b. Circuit Court.
c. Judge.
D. District Attorney.
Difficulty: Easy
2-2
4. 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.
Difficulty: Moderate
5. The Bill of Rights are:
A. The first 10 Amendments to the U.S. Constitution.
b. The Declaration of Independence.
c. The 10 Commandments.
d. The rules of conduct for the courtroom.
Difficulty: Easy
6. 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.
Difficulty: Moderate
7. Who has the sole discretion to bring charges in any case?
a. Investigator.
b. Circuit Court.
c. Judge.
D. District Attorney.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-3
8. 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.
Difficulty: Moderate
9. 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.
Difficulty: Moderate
10. Hearsay evidence may be used during:
a. If the defendant is pleading guilty.
b. During the trail if the defendant waives their right to hearsay evidence.
c. During a preliminary hearing.
D. None of the above.
Difficulty: Moderate
11. If a client turns over evidence to their attorney with the purpose of attempting to make it a
privileged communication, a judge may:
A. Allow the evidence into the case.
b. Never allow the evidence into the case.
c. Call a mis-trial.
d. Dismiss the attorney.
Difficulty: Hard
2-3
8. 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.
Difficulty: Moderate
9. 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.
Difficulty: Moderate
10. Hearsay evidence may be used during:
a. If the defendant is pleading guilty.
b. During the trail if the defendant waives their right to hearsay evidence.
c. During a preliminary hearing.
D. None of the above.
Difficulty: Moderate
11. If a client turns over evidence to their attorney with the purpose of attempting to make it a
privileged communication, a judge may:
A. Allow the evidence into the case.
b. Never allow the evidence into the case.
c. Call a mis-trial.
d. Dismiss the attorney.
Difficulty: Hard
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Chapter 02 - The Forensic Accounting Legal Environment
2-4
12. Burglary, Embezzlement, Larceny, Robbery, Fraud and Extortion are which types of
crimes?
a. Federal Criminal Acts.
b. State Criminal Acts.
c. Constitutional Violations.
D. Common Law Crimes.
Difficulty: Moderate
13. The difference between civil and criminal law violations is that criminal cases will
involve:
A. The violation of a Statute.
b. The violation of the U.S. Constitution.
c. The use of an attorney.
d. Plea agreements.
Difficulty: Easy
14. The U.S. Constitution contains how many amendments?
a. 12.
b. 14.
c. 24.
D. 27.
Difficulty: Hard
15. 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.
Difficulty: Moderate
2-4
12. Burglary, Embezzlement, Larceny, Robbery, Fraud and Extortion are which types of
crimes?
a. Federal Criminal Acts.
b. State Criminal Acts.
c. Constitutional Violations.
D. Common Law Crimes.
Difficulty: Moderate
13. The difference between civil and criminal law violations is that criminal cases will
involve:
A. The violation of a Statute.
b. The violation of the U.S. Constitution.
c. The use of an attorney.
d. Plea agreements.
Difficulty: Easy
14. The U.S. Constitution contains how many amendments?
a. 12.
b. 14.
c. 24.
D. 27.
Difficulty: Hard
15. 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.
Difficulty: Moderate
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Chapter 02 - The Forensic Accounting Legal Environment
2-5
16. District Attorneys are also known as:
A. Prosecutors.
b. Defendants.
c. Jury Foremen.
d. Court Recorders.
Difficulty: Easy
17. If an employee is determined to have been under pressure to commit the crime, had the
opportunity to commit the crime and has complete rationalization for committing the crime,
then the employee is caught in a(n):
a. Evidentiary motion.
b. Sworn statement.
C. Fraud triangle.
d. Fruit of the poisonous tree.
Difficulty: Moderate
18. A forensic accountant can become involved in financial crimes investigation by being:
a. An in-house accountant.
b. External auditor.
c. External consultant.
D. All of the above.
Difficulty: Moderate
19. If you are chosen to serve on a Grand Jury, you will serve:
a. For one trial.
B. For a specific period of time.
c. Until you are released by the judge.
d. Until you are selected for a trial jury.
Difficulty: Moderate
2-5
16. District Attorneys are also known as:
A. Prosecutors.
b. Defendants.
c. Jury Foremen.
d. Court Recorders.
Difficulty: Easy
17. If an employee is determined to have been under pressure to commit the crime, had the
opportunity to commit the crime and has complete rationalization for committing the crime,
then the employee is caught in a(n):
a. Evidentiary motion.
b. Sworn statement.
C. Fraud triangle.
d. Fruit of the poisonous tree.
Difficulty: Moderate
18. A forensic accountant can become involved in financial crimes investigation by being:
a. An in-house accountant.
b. External auditor.
c. External consultant.
D. All of the above.
Difficulty: Moderate
19. If you are chosen to serve on a Grand Jury, you will serve:
a. For one trial.
B. For a specific period of time.
c. Until you are released by the judge.
d. Until you are selected for a trial jury.
Difficulty: Moderate
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Chapter 02 - The Forensic Accounting Legal Environment
2-6
20. If evidence in a trial is deemed to be gained as a Fruit of a Poisonous Tree, it means that:
A. The evidence was gained via a defective search warrant.
b. The evidence was provided by someone who wanted the defendant to be found guilty.
c. The custody chain for the evidence has been broken.
d. The evidence was planted.
Difficulty: Moderate
21. To arrest a suspect, law enforcement must have:
a. Indisputable evidence that the person is guilty.
b. A search warrant.
C. Probable cause.
d. DNA evidence.
Difficulty: Moderate
22. If issued a Citation, a person must:
a. Report for incarceration.
B. Submit to the booking procedure within several days after the citation.
c. Sign a confession.
d. Provide evidence that they are not guilty.
Difficulty: Easy
23. 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.
Difficulty: Moderate
2-6
20. If evidence in a trial is deemed to be gained as a Fruit of a Poisonous Tree, it means that:
A. The evidence was gained via a defective search warrant.
b. The evidence was provided by someone who wanted the defendant to be found guilty.
c. The custody chain for the evidence has been broken.
d. The evidence was planted.
Difficulty: Moderate
21. To arrest a suspect, law enforcement must have:
a. Indisputable evidence that the person is guilty.
b. A search warrant.
C. Probable cause.
d. DNA evidence.
Difficulty: Moderate
22. If issued a Citation, a person must:
a. Report for incarceration.
B. Submit to the booking procedure within several days after the citation.
c. Sign a confession.
d. Provide evidence that they are not guilty.
Difficulty: Easy
23. 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.
Difficulty: Moderate
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Chapter 02 - The Forensic Accounting Legal Environment
2-7
24. The Foreign Corrupt Practices Act is applicable to whom?
a. United States Congressmen.
b. U.S. Corporations who do businesses in other country.
C. Any corporation.
d. All of the above.
Difficulty: Hard
25. The Sarbanes-Oxley (SOX) Act of 2002 provides detailed updates to and modernization
of:
a. The United States Code.
b. The United States Constitution.
c. The Federal Communications Commission.
D. The Securities and Exchange Act of 1934.
Difficulty: Moderate
26. The first major computer crimes act was:
a. The Sarbanes-Oxley (SOX) Act of 2002.
B. Computer Fraud and Abuse Act.
c. The Cyber Intrusion Detection Act of 1996.
d. Computer Detection Infiltration Act.
Difficulty: Hard
27. If two or more people agree to commit a crime, with even the smallest amount of
coordination, they have committed a:
A. Conspiracy.
b. Robbery.
c. Burglary.
d. Fraud.
Difficulty: Easy
2-7
24. The Foreign Corrupt Practices Act is applicable to whom?
a. United States Congressmen.
b. U.S. Corporations who do businesses in other country.
C. Any corporation.
d. All of the above.
Difficulty: Hard
25. The Sarbanes-Oxley (SOX) Act of 2002 provides detailed updates to and modernization
of:
a. The United States Code.
b. The United States Constitution.
c. The Federal Communications Commission.
D. The Securities and Exchange Act of 1934.
Difficulty: Moderate
26. The first major computer crimes act was:
a. The Sarbanes-Oxley (SOX) Act of 2002.
B. Computer Fraud and Abuse Act.
c. The Cyber Intrusion Detection Act of 1996.
d. Computer Detection Infiltration Act.
Difficulty: Hard
27. If two or more people agree to commit a crime, with even the smallest amount of
coordination, they have committed a:
A. Conspiracy.
b. Robbery.
c. Burglary.
d. Fraud.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-8
28. 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.
Difficulty: Hard
29. If a prosecutor and defense attorney are exchanging witness statements and other
evidence, they are participating in:
a. Fraud.
b. Conspiracy.
c. Voir dire.
D. Discovery.
Difficulty: Moderate
30. Double Jeopardy is when:
a. You can be tried for the same crime in both Federal and State courts.
b. You cannot be tried in the same court for the same crime once the trial begins.
c. You cannot be tried for the same crime in the same court if the judge dismisses the case.
D. All of the above are true.
Difficulty: Moderate
True / False Questions
31. Civil crimes always involve police, prosecutors and courts.
FALSE
Difficulty: Moderate
2-8
28. 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.
Difficulty: Hard
29. If a prosecutor and defense attorney are exchanging witness statements and other
evidence, they are participating in:
a. Fraud.
b. Conspiracy.
c. Voir dire.
D. Discovery.
Difficulty: Moderate
30. Double Jeopardy is when:
a. You can be tried for the same crime in both Federal and State courts.
b. You cannot be tried in the same court for the same crime once the trial begins.
c. You cannot be tried for the same crime in the same court if the judge dismisses the case.
D. All of the above are true.
Difficulty: Moderate
True / False Questions
31. Civil crimes always involve police, prosecutors and courts.
FALSE
Difficulty: Moderate
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Chapter 02 - The Forensic Accounting Legal Environment
2-9
32. The first 10 Amendments are the primary foundation to the United States Code.
FALSE
Difficulty: Easy
33. The most important U.S. Code to Forensic Accountants is Title 18.
TRUE
Difficulty: Moderate
34. The Supreme Court must hear every case of appeal sent from the Circuit Courts.
FALSE
Difficulty: Moderate
35. There are many ways for a forensic accountant to become involved in a financial-crimes
investigation, such as in the capacity of in-house accountant, as an external auditor, or as an
outside consultant.
TRUE
Difficulty: Easy
36. The three elements of the Fraud Triangle are Pressure, Opportunity, and Rationalization.
TRUE
Difficulty: Easy
37. Search Warrants are the same as Affidavits.
FALSE
Difficulty: Easy
2-9
32. The first 10 Amendments are the primary foundation to the United States Code.
FALSE
Difficulty: Easy
33. The most important U.S. Code to Forensic Accountants is Title 18.
TRUE
Difficulty: Moderate
34. The Supreme Court must hear every case of appeal sent from the Circuit Courts.
FALSE
Difficulty: Moderate
35. There are many ways for a forensic accountant to become involved in a financial-crimes
investigation, such as in the capacity of in-house accountant, as an external auditor, or as an
outside consultant.
TRUE
Difficulty: Easy
36. The three elements of the Fraud Triangle are Pressure, Opportunity, and Rationalization.
TRUE
Difficulty: Easy
37. Search Warrants are the same as Affidavits.
FALSE
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-10
38. Plea Bargains may only take place prior to a trial beginning.
FALSE
Difficulty: Easy
39. A Motions in Limine a request from the defendant to exclude some evidence that may be
introduced during the trial.
TRUE
Difficulty: Moderate
40. If a witness’s testimony is damaged upon cross examination, the defense may ask for a re-
direct examination.
TRUE
Difficulty: Moderate
Essay Questions
41. Describe the differences between a bench trial and a trial by jury?
A bench trial is a trial where the judge decided guilt or innocence. A trial by jury is where 12
members of the jury decide guilt or innocence.
Difficulty: Easy
2-10
38. Plea Bargains may only take place prior to a trial beginning.
FALSE
Difficulty: Easy
39. A Motions in Limine a request from the defendant to exclude some evidence that may be
introduced during the trial.
TRUE
Difficulty: Moderate
40. If a witness’s testimony is damaged upon cross examination, the defense may ask for a re-
direct examination.
TRUE
Difficulty: Moderate
Essay Questions
41. Describe the differences between a bench trial and a trial by jury?
A bench trial is a trial where the judge decided guilt or innocence. A trial by jury is where 12
members of the jury decide guilt or innocence.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-11
42. Explain the construction of the United States Constitution and specifically describe the
fourth article and the concepts it recognizes?
The U.S. Constitution is consists of 7 articles and 27 amendments. The first 3 articles define
the 3 major branches of government: the executive, judicial, and legislative branches. The
fourth article defines the concepts of "full faith and credit" and "privileges and immunities".
The full faith and credit concept requires that states "recognize" the public acts, records, and
judicial proceedings of other states. The privileges and immunities concept more or less
requires states to treat the citizens from other states the same as their own. For example, it
would be unconstitutional for California to forbid citizens of New York from using its public
beaches.
Difficulty: Hard
43. If a trial will be held in the federal court system, and subsequently appealed, explain the
types and names of the courts your case will be heard in.
U.S. District Courts, of which there are 100 districts, some with multiple court houses, then
the case would be appealed to a U.S. Circuit Court of Appeal, of which there are 11 and two
D.C District Courts, then the case would go to the U.S. Supreme Court, which only hears
cases that it agrees to review.
Difficulty: Moderate
44. Who are District Attorneys and what is their function within the court system?
District Attorneys are also referred to as Prosecutors. They are the plaintiff in the cases and
have sole discression as to charges being made against a defendant or not.
Difficulty: Easy
2-11
42. Explain the construction of the United States Constitution and specifically describe the
fourth article and the concepts it recognizes?
The U.S. Constitution is consists of 7 articles and 27 amendments. The first 3 articles define
the 3 major branches of government: the executive, judicial, and legislative branches. The
fourth article defines the concepts of "full faith and credit" and "privileges and immunities".
The full faith and credit concept requires that states "recognize" the public acts, records, and
judicial proceedings of other states. The privileges and immunities concept more or less
requires states to treat the citizens from other states the same as their own. For example, it
would be unconstitutional for California to forbid citizens of New York from using its public
beaches.
Difficulty: Hard
43. If a trial will be held in the federal court system, and subsequently appealed, explain the
types and names of the courts your case will be heard in.
U.S. District Courts, of which there are 100 districts, some with multiple court houses, then
the case would be appealed to a U.S. Circuit Court of Appeal, of which there are 11 and two
D.C District Courts, then the case would go to the U.S. Supreme Court, which only hears
cases that it agrees to review.
Difficulty: Moderate
44. Who are District Attorneys and what is their function within the court system?
District Attorneys are also referred to as Prosecutors. They are the plaintiff in the cases and
have sole discression as to charges being made against a defendant or not.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-12
45. Describe how working papers can be an aid to the forensic accountant?
Forensic accountants can use working papers to help ‘lock in' the stories of bookkeepers and
accountants within a company that is being investigated and keep a record of what has
occurred in the financial systems of that company.
Difficulty: Moderate
46. Prior to a trial, the prosecution and defense may be involved in plea bargains. Explain how
this process works?
Prosecution will typically offer a defendant a reduced sentence for pleading guilty or
providing evidence toward implicating others in this or other crimes. It is estimated that 90%
of all cases are ‘pleaded out’.
Difficulty: Moderate
47. Explain the Personal Knowledge Rule and how expert witnesses are exempt from it.
The personal knowledge rule is that witnesses can only testify to things that they personally
observe with one or more of their own senses. Expert witnesses are exempt from the personal
knowledge rule and are allowed to draw conclusions based upon evidence and facts presented
to them.
Difficulty: Moderate
48. When are communications considered privileged?
Privileged communications are typically between professionals and their clients such as
attorney-client, spouse-spouse, doctor-patient, psychoanalysts-patient, clergy-congregation,
and accountant-client in certain tax matters.
Difficulty: Easy
2-12
45. Describe how working papers can be an aid to the forensic accountant?
Forensic accountants can use working papers to help ‘lock in' the stories of bookkeepers and
accountants within a company that is being investigated and keep a record of what has
occurred in the financial systems of that company.
Difficulty: Moderate
46. Prior to a trial, the prosecution and defense may be involved in plea bargains. Explain how
this process works?
Prosecution will typically offer a defendant a reduced sentence for pleading guilty or
providing evidence toward implicating others in this or other crimes. It is estimated that 90%
of all cases are ‘pleaded out’.
Difficulty: Moderate
47. Explain the Personal Knowledge Rule and how expert witnesses are exempt from it.
The personal knowledge rule is that witnesses can only testify to things that they personally
observe with one or more of their own senses. Expert witnesses are exempt from the personal
knowledge rule and are allowed to draw conclusions based upon evidence and facts presented
to them.
Difficulty: Moderate
48. When are communications considered privileged?
Privileged communications are typically between professionals and their clients such as
attorney-client, spouse-spouse, doctor-patient, psychoanalysts-patient, clergy-congregation,
and accountant-client in certain tax matters.
Difficulty: Easy
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Chapter 02 - The Forensic Accounting Legal Environment
2-13
49. Describe some common law crimes.
Larceny, Burglary, Conspiracy, Embezzlement, Fraud (False Pretenses), Robbery, Extortion,
Arson, Solicitation, Aiding and Abetting (and the proper definitions of each of these)
Difficulty: Moderate
50. Compare and contrast 18 USC 96: Racketeer Influenced Corrupt Organizations (RICO),
15 USC 78dd: Foreign Corrupt Practices Act (FCPA) of 1977 and The Sarbanes-Oxley
(SOX) Act of 2002.
The answer will contain some basic parameters that the codes/acts contain and describe how
each of them is designed to cover illegal activities that occur in differing circumstances or
industries.
Difficulty: Hard
2-13
49. Describe some common law crimes.
Larceny, Burglary, Conspiracy, Embezzlement, Fraud (False Pretenses), Robbery, Extortion,
Arson, Solicitation, Aiding and Abetting (and the proper definitions of each of these)
Difficulty: Moderate
50. Compare and contrast 18 USC 96: Racketeer Influenced Corrupt Organizations (RICO),
15 USC 78dd: Foreign Corrupt Practices Act (FCPA) of 1977 and The Sarbanes-Oxley
(SOX) Act of 2002.
The answer will contain some basic parameters that the codes/acts contain and describe how
each of them is designed to cover illegal activities that occur in differing circumstances or
industries.
Difficulty: Hard
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Chapter 09 - Fraud Examination Evidence I: Physical, Documentary, and Observational Evidence
9-1
Chapter 09
Fraud Examination Evidence I: Physical, Documentary, and Observational
Evidence
Multiple Choice Questions
1. Evidence includes:
a. Physical objects
b. Documents
c. Observations
D. All of the above
Difficulty: Easy
2. If evidence is tangible, it is said to be _______ evidence.
a. Documented
b. Heresy
C. Physical
d. Forged
Difficulty: Moderate
3. Which of the following would be a violation of the chain of custody?
a. Locking documents in a safe that only the investigator has the combination to.
B. Mailing original documents to another party without proof of receipt.
c. Signing over original documents to legal counsel.
d. Documenting the placing of items in a case file for storage.
Difficulty: Moderate
4. How many ways is documentary evidence collected?
A. 4
b. 3
c. 2
d. 1
Difficulty: Easy
9-1
Chapter 09
Fraud Examination Evidence I: Physical, Documentary, and Observational
Evidence
Multiple Choice Questions
1. Evidence includes:
a. Physical objects
b. Documents
c. Observations
D. All of the above
Difficulty: Easy
2. If evidence is tangible, it is said to be _______ evidence.
a. Documented
b. Heresy
C. Physical
d. Forged
Difficulty: Moderate
3. Which of the following would be a violation of the chain of custody?
a. Locking documents in a safe that only the investigator has the combination to.
B. Mailing original documents to another party without proof of receipt.
c. Signing over original documents to legal counsel.
d. Documenting the placing of items in a case file for storage.
Difficulty: Moderate
4. How many ways is documentary evidence collected?
A. 4
b. 3
c. 2
d. 1
Difficulty: Easy
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Subject
Accounting