Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Forensic Accounting > Forensic Accounting Final > Flashcards

Forensic Accounting Final Flashcards

1
Q

What is the source of much information known about employee fraud?

a) Police reports
b) Criminal court case
c) Isolated anecdotal cases
d) None

A

c) Isolated anecdotal cases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What percent of employees have been found to be fundamentally honest?

a) 10 to 15 percent
b) 20 to 25 percent
c) About 66 percent
d) About 50 percent

A

b) 20 to 25 percent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What element of the fraud triangle is likely to “come easy” for an employee with a dissocial personality disorder?

a) Opportunity
b) Motive
c) Pressure
d) Rationalization

A

d) Rationalization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The normally honest employee will do which of the following?

a) Steal when tempted with easy-to-steal opportunities
b) Not steal unless angry with the company
c) Steal given the right opportunity and pressure
d) Will not steal but will borrow from the company without permission

A

c) Steal given the right opportunity and pressure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

To which of the following does fraud created by insider information period refer?

a) The time management has to correct fraudulent information disclosed
b) The time frame within which insider trading is prohibited
c) The time frame between the disclosure of fraudulent information and the information as corrected
d) The time frame within which fraud is committed
e) None

A

c) The time frame between the disclosure of fraudulent information and the information as corrected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Which of the following is more likely to be involved with the financial statement fraud of a company?

a) The treasurer
b) The chairman of the audit committee
c) The chairman of the board of directors
d) The CEO
e) The largest shareholder
f) All of the above are equally likely to be involved

A

d) The CEO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who is more likely to be involved in the misappropriation of assets?

a) The CEO
b) The largest shareholder
c) The executive secretary
d) The audit committee
e) All of the above
d) None of the above

A

a) The CEO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which of the following is a normal economic choice available to management?

a) Dividend policy
b) Deferral of expenses
c) Nonpayment of lease obligations
d) Bonuses paid to upper level management
e) None of the above

A

b) Deferral of expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Which of the following types of company is least likely susceptible to fraud?

a) A company that has only cash sales
b) A construction company that recognizes income by the % of completion method
c) A calendar year company that conducts most of its business at the year end
d) A company with an IT system developed and maintained by the auditors
e) A company that maintains and inventory
f) All of the above are equally likely
g) None

A

f) All of the above are equally likely

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Which element in inventory computation is most likely to lead to fraud?

a) Beginning inventory
b) Purchases
c) Cost of Goods Sold
d) Ending inventory

A

d) Ending inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

To which of the following does improper accounting treatment refer?

a) Misclassifying a capital asset as an expense
b) Recording the purchase price of an asset at market price, not cost.
c) Neglecting to amortize an intangible asset
d) Failing to disclose the results of a recent judgement against a company
e) a,b, and d
f) Only b and c
g) All of the above
h) None

A

g) All of the above

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A manager with an incentive-driven employment contract could be more likely to do which of the following?

a) Inflate revenue
b) Capitalize items rather than expense them
c) Minimize dividends to the stockholders
d) Expense stock options
e) All of the above

A

a) Inflate revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which of the following can motivate a manger to commit fraud?

a) A debt covenant agreement that requires the company to maintain a certain percentage of assets as cash
b) compensation through a set salary
c) An illegal agreement with a supplier
d) a and b
e) a and c
f) All of the above
g) None

A

e) a and c

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of the following entities is not a primary focus of SOX in preventing financial statement fraud?

a) The board of directors
b) The audit committee
c) The PCAOB
d) The SEC
e) External Auditors
f) Internal Auditors

A

d) The SEC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Which of the following is best at catching an undetected financial statement fraud?

a) The CEO
b) The CFO
c) The audit committee
d) The external auditor
e) The PCAOB
f) The stock market

A

d) The external auditor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

True or False:

Research has shown that fraud is more likely to occur in a company with assets of less than $100 million.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

True or False:

Audits by a large auditing firm are more likely to be subject to fraud.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

True or False:

Aggressive earnings management always indicates financial statement fraud.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Earnings smoothing is a legitimate tool available to management to equalize the income of the business from year to year.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

True or False:

According to the concept of accrual accounting, the deferral of an expense today has no effect on tomorrow’s revenues.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

True or False:

Channel stuffing usually occurs at the beginning of an accounting period

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

True or False:

Most financial statement fraud occurs through the deferral of expenses

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

True or False:

According to the PCAOB standards, accountants are to keep working papers for a minimum of 5 years

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

True or False:

The use of discretion in an accounting method is an abuse of discretion.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Which of the following is another name for the Sarbaynes-Oxley Act of 2002?

a) Public Accounting Reform and Investor Protection Act of 2002
b) White Collar Crime Penalty Enforcement Act of 2002
c) Corporate and Criminal Fraud Accountability Act of 2002
d) All of the above

A

d) All of the above

26
Q

Which of the following describes the duties of the Department of Corporate Finance?

a) Issues investigative subpoenas
b) Regulates broker-dealers such as the National Association of Security Dealers
c) Reviews and monitors accounting reports
d) Monitors the accounting profession including groups that contribute to GAAP
e) Regulates investment companies and investment advisors
f) b and c
g) All of the above

A

c) Reviews and monitors accounting reports

d) Monitors the accounting profession including groups that contribute to GAAP

27
Q

Which of the following rule-making entities is not affected by SOX?

a) The PCAOB
b) The SEC
c) The Securities Act of 1934
d) The Federal Trade Commission

A

d) The Federal Trade Commission

28
Q

Which of the following must be reported to a company’s audit committee?

a) All material written communications between the audit firm and the client
b) All material verbal communications between the audit firm and the client
c) All verbal discussions relating to alternative accounting treatments
d) All critical accounting policies used in the audit
e) All of the above
f) a, b, and c
g) a, c, and d

A

g) a, c, and d

29
Q

Which of the following is a nonaudit service that auditors are prohibited from providing to a client contemporaneously with an audit?

a) Financial information system design
b) Actuarial services
c) Bookkeeping services
d) Investment advice
e) Human resources
f) None of the above
g) All of the above

A

g) All of the above

30
Q

Which of the following violation under SOX could result in imprisonment?

a) Mail fraud
b) Failure to have an ethics enhancement program
c) Altering or destroying documents
d) Defrauding shareholders of publicly held companies
e) All of the above
f) a, c, and d

A

f) a, c, and d

31
Q

Which of the following is an economic crime affected by SOX?

a) Antitrust laws
b) Taxation laws
c) Money laundering
d) None of the above
e) All of the above

A

e) All of the above

32
Q

Which of the following cannot be used to influence the sentence for violation of SOX?

a) Criminal history
b) Multiple counts of violation
c) Acceptance of responsibility
d) Compliance with tax laws
e) None of the above

A

d) Compliance with tax laws

33
Q

Which of the following is a condition that must be met for an organization to qualify for a point reduction under federal sentencing guidelines?

a) Establishment of standards and procedures to detect and prevent criminal conduct
b) Adequately funded and organized ethics program
c) Effective training program to communicate the ethics program and compliance to the employees
d) Length of time an ethics program has been in existence
e) Number of employees in an organization
f) All of the above
g) a, b, and c

A

g) a, b, and c

34
Q

Which of the following is not a requirement for the PCAOB?

a) Consist of 5 members
b) Have as its chairperson an active CPA
c) Have members elected by Congress
d) Have only 2 members who are or have been a CPA
e) All of the above
f) b and c

A

f) b and c

35
Q

True or False:

SOX applies to all corporations

A

False

36
Q

True or False:

The PCAOB was established by the Securities Act of 1934

A

False

37
Q

True or False:

Auditors must retain their working papers for a minimum of 5 years

A

True

38
Q

True or False:

The auditor must design and create an effective internal control system

A

False

39
Q

True or False:
Auditor independence is breached by having the audit firm also prepare the tax returns of the publicly trades corporation

A

False

40
Q

True or False:

An audit partner or a reviewing cannot audit the same firm for more than 5 consecutive years

A

True

41
Q

True or False:

A Section 302 certification is filed by the publicly traded company’s audit firm

A

False

42
Q

True or False:
The SEC may permanently bar an executive who violates securities law from serving as an officer or director of a publicly traded company

A

True

43
Q

True or False:

With few exceptions, all personal loans to directors and executives of a company are prohibited

A

True

44
Q

True or False:
A public accounting firm is prohibited from auditing a client if the CEO of the audited company once worked for the auditing firm

A

False

45
Q

True or False:

All communications between an audit firm and the client must be reported to the audit committee

A

False

46
Q

True or False:

Senior management must report changes in securities ownership within 5 days

A

False (2 days)

47
Q

True or False:

A Section 404 compliance certification includes an assessment of a company’s internal controls by corporate management

A

True

48
Q

True or False:
Whistle-blowers are protected from recriminations and retaliation only if the alleged charges lead to criminal charges being filed against the wrongdoers

A

False

49
Q

True or False:

Federal sentencing guidelines can be reduced if the organization maintains an ethics and compliance program

A

True

50
Q

True or False:

Under federal sentencing guidelines, a judge has no discretion to modify the assigned sentnece

A

False

51
Q

A DSL Internet connection would normally have which type of IP address?

a) Static
b) Dynamic
c) Fixed
d) Determinable
e) None

A

a) Static

52
Q

The four types of evidence include which of the following?

a) Testimonial, derived, physical, and documentary
b) Testimonial, constructive, derived, and demonstrative
c) Physical, testimonial, documentary, and demonstrative
d) Physical, constructive, testimonial, and demonstrative
e) None of the above

A

c) Physical, testimonial, documentary, and demonstrative

53
Q

Which individual focuses on crime scene processing?

a) Forensic scientist
b) Forensic pathologist
c) Serologist
d) Criminalist
e) None of the above

A

d) Criminalist

54
Q

Which of the following is not an objective of a computer forensic investigation?

a) To identify the perpetrator of a crime or other type of malfeasance
b) The discover and preserve computer-related evidence
c) To locate and recover data relating to crime or civil matter
d) To reconstruct damaged databases and files
e) All of the above would be considered an objective

A

e) All of the above would be considered an objective

55
Q

What is the Locard exchange principle?

a) It takes at least two people to commit a crime
b) Every contact leaves a trace
c) Forensic scientists must share data to solve a crime
d) Some evidence will be lost when transferring it from the scene to the lab
e) None of the above

A

b) Every contact leaves a trace

56
Q

When an employee does not ting in a sale or simply pockets the cash, this is an example of

a) advanced sales skimming
b) basic sales skimming
c) short-change sales
d) cash stolen in transmission
e) none of the above

A

b) basic sales skimming

57
Q

Which of the following is not part of the fraud triangle?

a) Greed
b) Pressure
c) Opportunity
d) Rationalization

A

a) Greed

58
Q

The corporate culture’s primary role in contributing to employee fraud is likely to be in the area of which of the following?

a) Pressure
b) Opportunity
c) Validation
d) Rationalization
e) None of the above

A

a) Pressure

59
Q

When are assets most vulnerable to fraud?

a) Before they are entered into the accounting system
b) After they are put into the inventory system
c) During disposal
d) During changes of custody
e) None of the above

A

a) Before they are entered into the accounting system

60
Q

When an accounts receivable clerk is allowed to steal one customer payment and apply the next one toward that payment and so on, this is a violation of

a) Segregation of duties
b) Management oversight
c) Checks and balances
d) None of the above

A

a) Segregation of duties

Forensic Accounting (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions