CFF Flashcards

Question

What is the role of a non-testifying expert whose work is typically not subject to discovery?

Answer 1

Non-testifying experts provide a wide range of advice, opinion, analyses, and so on for their clients. They are typically not subject to discovery when retained by the attorney.

Answer 2

Conflicting out an expert involves familiarizing an expert with one's case with no intention of ever retaining the expert, thereby forcing the expert to decline an engagement with the opposing party due to a conflict of interest.

Answer 3

The audit committee.

Answer 4

Review documents and other relevant information, then conduct interviews. Reviewing documents and obtaining relevant information provides a basis for asking the right questions in interviews, and also for identifying suspects.

Answer 5

Information questions are designed to gain information relevant to the investigation.

Answer 6

Assessment questions are designed to determine if the subject shows signs of deception and to assess the interviewee's honesty.

Answer 7

Admission-seeking questions are asked of subjects that show signs of deception.

Answer 8

Introductory questions are asked at the very beginning of the interview and seek to establish rapport, gain general background information, and establish a baseline for how the subject honestly responds.

Answer 9

After admission-seeking questions. Answers to admission-seeking questions may or may not include a confession. Either way, some concluding questions are appropriate, although some interviewers might skip the concluding questions when there is a signed confession.

Answer 10

1. Maintaining the chain of custody. The chain of custody communicates the characteristics of evidence transference and the integrity of the justice system and interjects accountability among its processes and procedures involving evidence, Accountability exists through the specifying of individuals between whom evidence is transferred and passed. 2. Working with copies, not originals. Working with copies of documents preserves the original document for evidentiary purposes. 3. Marking documents with identification numbers. Assigning document identification numbers assists with recalling documents and keeps documents organized.

Answer 11

Procurement fraud.

Answer 12

Lapping schemes.

Answer 13

Sales skimming schemes involve misappropriation of incoming cash. Such schemes can be classified according to the point in the cash collection process when the cash is stolen. This point can be at any time from the point of sale until the cash is properly deposited in the bank.

Answer 14

Money laundering is a process of transforming ill-gotten funds to what appears to be legitimate money or other assets.

Answer 15

When checks are washed, the payee's name is replaced with a name from a stolen identity. The check is then cashed or negotiated using the stolen identity. Check washing is associated with identity theft.

Answer 16

Payroll fraud includes improper hiring, improper charges to employee personnel files, and improper reporting of employee activities.

Answer 17

1. Procurer. The procurer may purchase the information from "specialists" on the internet or obtain it directly from hacking and phishing schemes, street sources, or leakers from inside an organization. 2. Shopper. The shopper is the one who actually goes out and does things like pass stolen checks and use fake or stolen credit cards. 3. Document forger. A document forger will use information from the procurer to create forged documents.

Answer 18

Chapter 13 applies to individuals with means-tested income large enough to disqualify them from filing under Chapter 7. The court may discharge some of the debt and create a payment plan for the rest.

Answer 19

Chapter 11 involves the creation of a payment plan and does not involve total liquidation of the business or assets. If a debtor passes the means test, they cannot file a Chapter 11.

Answer 20

Chapter 7 applies to both individuals and businesses. Subject to certain exceptions, it provides for complete liquidation of all the debtor's assets and the complete elimination of debtor's obligations. Individual debtors who possess sufficient means as determined by a means test must file under Chapter 13 instead of Chapter 7.

Answer 21

Chapter 12 applies to farming and fishing businesses.

Answer 22

A fictitious bidder scheme relates to the creation of a fictitious company in order to embezzle funds.

Answer 23

Chapter 9 relates to the reorganization of a municipality.

Answer 24

Chapter 15 relates to cross-border insolvency.

Answer 25

A fraudulent conveyance occurs in bankruptcy when a debtor attempts to avoid a debt by transferring money to another person or company.

Answer 26

A petition mill is a fraud in which the perpetrator (typically a purported financial adviser) files hastily prepared bankruptcy documents in the name of victims who come to the perpetrator as clients.

Answer 27

Bust-outs are fraud schemes where an individual applies for a credit card, establishes a normal usage patter and repayment history, then makes substantial purchases. Subsequent to making the purchases, the perpetrator files for bankruptcy.

Answer 28

Data carving is putting together pieces of deleted files.

Answer 29

The file viewer allows previewing of files and email messages in a wide variety of formats.

Answer 30

The registry viewer assists the examiner in acquiring information from the Windows registry that is relevant to the investigation.

Answer 31

Anti-money laundering.

Answer 32

1.Extracting data from accounting or ERP systems. 2. Running sophisticated queries against a data set. 3. Testing program logic and controls.

Answer 33

1. That they can be objective. 2. That they are competent in the area of matrimonial forensics. 3. That they are good communicators.

Answer 34

Practitioners do not need to have previously performed a matrimonial forensic engagement as long as they believe they can accomplish the engagement competently and objectively, and clearly present their results.

Answer 35

State law usually takes precedence over federal law.

Answer 36

Earnings management can encompass the deferral of sales by legitimate means (for example, deciding not to ship merchandise when sales are recorded to shipping terms), and is not illegal. The type of earnings management that is forbidden by GAAP is that which results in an intentional misstatement of financial position and results of operations. A certain amount of earnings management is expected by the market and most likely is incorporated into the market price of stock. Not everyone agrees that earnings management, even the legal type, is ethical.

Answer 37

An accrued liability represents an expense that a business has incurred but has not yet paid.

Answer 38

Contingent liabilities that management can use to artificially increase income of subsequent periods are sometimes called cookie jar reserves.

Answer 39

Accrued revenue represents revenue that has been earned, but payment has yet to be received by the company.

Answer 40

Deferred revenues are a generally accepted account used to typically record payments received for amounts where revenue are not yet earned.

Answer 41

Boards of directors composed mainly of inside directors is indicative of an increased risk of fraud because inside directors are believed to be less independent (and perhaps less objective) than are outside directors and thus have more to gain by engaging in inappropriate behavior.

Answer 42

Voluntary management forecasts that contain overly optimistic financial results are a red flag because management may feel pressure to meet those published forecasts and do so by engaging in inappropriate behavior.

Answer 43

An improved financial condition of a company is a red flag if its industry is not experiencing similar improvements, because the reason fore the improved financial condition could be an inappropriate form of earnings management.

Answer 44

An abnormal decline in customer demand of products or services provided by a company is a red flag because management may feel pressure to engage in financial statement misrepresentation to meet earnings targets so that the market price of stock does not decline and bonuses are received.

Answer 45

A bill and hold is a form of sales arrangement in which a seller of goods bills a customer for products but does not ship the product until a later date. This results in improper revenue recognition.

Answer 46

Channel stuffing is a business practice in which a company, or a sales force within a company, inflates its sales figures by forcing more products through a distribution channel than the channel is capable of selling.

Answer 47

A lapping scheme is a fraudulent practice that involves altering accounts receivables to hide the fact that a receivables payment has been stolen.

Answer 48

Recording revenues for sales received around year-end in the wrong period in order to manipulate revenues is a form of improper cutoff of sales.

Answer 49

If a person who was injured later becomes able to work, that person has a duty to go back to work to earn wages to stop or reduce personal economic losses.

Answer 50

According to U.S. federal tax law, damages related to personal physical injuries are not taxable.

Answer 51

Because an injured party will not be taxed on damages related to personal physical injuries, the party's lost wage damages should be measured from after-tax wages rather than higher gross wages to make them whole; paying an injured party damages based on gross wages will make it more than whole because it does not pay taxes on these damages.

Answer 52

Use all information up to the present time. The "book of wisdom" in the Supreme Court opinion refers to using all information known through the present time (that is, hindsight is needed to obtain justice).

Answer 53

1. Absolute value models. 2. Relative value models. 3. Option pricing models.

Answer 54

1. Income approach. 2. Market approach. 3. Asset approach.

Answer 55

Fair market value.

Answer 56

Fair value.

Answer 57

Fair value.

Answer 58

Investment value. Strategic buyers are generally in the same industry as the target firm and are interested in buying the firm for strategic reasons rather than investment return; investment value is generally the type of value in strategic acquisitions - the value to a particular buyer.

Answer 59

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Answer 60

Intrinsic value is the perceived or calculated value of a company, including the tangible and intangible factors.

Answer 61

Investment value is the value of a property to a particular investor.

Answer 62

Fair market value is the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market.

Answer 63

1. Any assumptions made. 2. Any limiting conditions. 3. Any hypothetical conditions. Compensation received does not need to be disclosed in a written valuation report.

Answer 64

To assist the trier of fact.

Answer 65

Perform a conflict of interest check.

Answer 66

Forensic and Valuation Services Executive Committee.

Answer 67

Both forensic accounting services and valuation services.

Answer 68

The AICPA Code of Professional Conduct.

Answer 69

Arraignment.

Answer 70

1. Physical. 2. Demonstrative. 3. Testimonial.

Answer 71

Relevance and its limits.

Answer 72

Authentication

Answer 73

1. Arbitration. 2. Mediation. 3. Settlement Conference.

Answer 74

Dispute resolution.

Answer 75

Assessment.

Answer 76

Introductory.

Answer 77

An effective fraud detection system.

Answer 78

1. Opportunity. 2. Rationalization. 3. Pressure.

Answer 79

1. Short shipments. 2. Supplying substandard goods. 3. Fraudulent cost-plus billing.

Answer 80

Over 15 million.

Answer 81

1. Placement. 2. Layering. 3. Integration.

Answer 82

Chapter 9.

Answer 83

Chapter 11.

Answer 84

Ghost Acquisition.

Answer 85

The Fourth Amendment.

Answer 86

IP Tracking.

Answer 87

The dark web.

Answer 88

Loan applications or personal financial statements.

Answer 89

Reasonable certainty.

Answer 90

Absolute value.

Answer 91

Market appraoch.

Answer 92

Determining independence.

Answer 93

1. Litigation services (testifying expert, fact witness, non-testifying consultant). 2. Investigative services (consultant in cases that do not involve actual or threatened litigation, fact witness).

Answer 94

Guidance is authoritative if issued only after following a process that includes deliberation in meetings open to the public, public exposure of proposed statements, and a formal vote by the appropriate body designated by the AICPA to issue such guidance.

Answer 95

1. Preface 2. Members in Public Practice 3. Members in Business 4. Other Members

Answer 96

1. Identify threats. 2. Evaluate the significance of a threat. 3. Identify and apply safeguards.

Answer 97

1. Adverse interest threat - A client threatens to sue the forensic accountant. Now there is an adverse situation between the client and the forensic accountant. 2. Advocacy threat - Objectivity and independence is compromised. 3. Familiarity threat - A close friend may ask us to perform work. 4. Management participation threat - We don't want to step in and take on the role of management. 5. Self-interest threat - If work is performed under a contingent fee where some other benefit it available. 6. Self-review threat - The forensic accountant may rely on the firm's own work product in terms of determining an opinion or reaching a conclusion. 7. Undue interest threat - A threat to dismiss if the forensic accountant does not reach a certain conclusion.

Answer 98

1. In personam - Does the court have the authority to hear a case based on location? 2. In rem - The court has jurisdiction because of a particular subject matter.

Answer 99

They need to file a writ of cert.

Answer 100

The court is being asked to make a judgment simply based on the pleadings.

Answer 101

Asks the court to dismiss the case based on everything that's been argue up to that point of time.

Answer 102

A judicial order that restrains a person from beginning or continuing an action, or compels a person to carry out a certain act.

Answer 103

1. Compensatory damages - Lost wages, lost earnings, due to a bad act. 2. Nominal damages. 3. Punitive damages - An amount that's added on over and above compensatory damages, designed to punish the wrong-doer.

Answer 104

1. Federal District Courts. 2. Federal Appeals Courts. 3. United States Supreme Court. 4. Tax Court - Has jurisdiction over disputed tax deficiencies before they are paid. 5. Court of Federal Claims - Has exclusive jurisdiction over claims for money damages against the United States, including disputed federal contracts.

Answer 105

1. Direct - Evidence that can be believed without inference. (Video of Toyota rear ending Chevy). 2. Circumstantial - Depends on credibility and inferences of witnesses. (Photo of Toyota having damage to front and Chevy having damage to back).

Answer 106

1. Testimonial - Testimony by a witness who makes assertions; facts. (The drivers of the Toyota and Chevy's memories of what happened). 2. Real of Physical - Real of tangible items that are considered indisputable. (The damage that was done to the Chevy is real and indisputable). 3. Demonstrative - Evidence that illustrates a matter of significance.

Answer 107

1. It must be relevant. 2. It must have a proper foundation. 3. It must be in the proper form. 4. No exceptions can apply.

Answer 108

A set of written questions directed to the other party to the lawsuit. May relate to any matter that may be required into under the score of the discovery. Only the parties to who they are directed may answer. Sent out during the pre-trial process and limited to a maximum of 25 questions to each party. Must be answered under oath under a wet time limit.

Answer 109

1. Identification Interrogatories - These seek facts such as names, addresses of potential witnesses, and summaries of data. 2. Contention Interrogatories - These seek to explore what a party is contending and the basis for those contentions. Often much more controversial and subject to much more abuse.

Answer 110

The examination of a witness or a party under oath in the presence of a court reporter. Unlike interrogatories, anyone who has knowledge or expertise relevant to the case may be deposed, they don't have to be a party to the lawsuit. If a party is deposed who is not a party to the lawsuit, they have to be subpoenaed.

Answer 111

A request made to parties of the lawsuit and addresses having copies of evidence in the form of paper documents. Asking for all types of electronically stored evidence turned over (emails, working papers, etc.).

Answer 112

Can only be served on a party to the litigation. The reason triggering the request for a medical exam must be raised directly by the pleadings or a factual contention through discovery.

Answer 113

Used at the end of the discovery process to screen out matters and pleadings that have been clarified by discovery. There are no limits on the number of requests for admission.

Answer 114

No. It is covered by the attorney-client privilege and it not subject to be produced to the other side.

Answer 115

Yes. Often times an attorney will engage a forensic accountant as a consultant just to get some advice, knowing that the advice won't be turned over to the other side. An expert witness' advice might be subject to discovery.

Answer 116

Yes. As a witness you could be asked questions about the work you perform. You could be asked questions above the advice that you give.

Answer 117

Testimony by Expert Witnesses.

Answer 118

A written motion that requests the court to enter an order regarding the admissibility of particular evidence at trial, including expert testimony. This would include expert testimony.

Answer 119

The basis of the expert opinion.

Answer 120

Whether the opinion ultimately addresses the issue at hand.

Answer 121

Disclosing the facts or data underlying the expert opinion. The info that the expert relies on in formulating their opinion.

Answer 122

The concept of court-appointed expert witnesses.

Answer 123

1. There was a duty to exercise professional care. 2. The duty above was breached. 3. A causal relationship between the breach of duty and the resulting injury needs to be demonstrated. 4. There must be an actual loss or damages.

Answer 124

1. To have professional liability insurance. If a claim does arise, to have a insurer behind you who can help defend and fund, and if there is an issue ultimately settle the claim. 2. Obtain indemnity from the retaining client or attorney.

Answer 125

1. ADR saves money. The litigation process is very expensive. 2. There is stress, litigation, and anxiety that litigation can produce, that may be avoided under an ADR process. 3. Can help to protect privacy. Litigation can be a public affair (pleadings), available for public to view. Public can literally show up in court and watch the proceedings. Media as well. These types of things are not made public in an ADR setting. 4. ADR can build relationships. Litigation can make enemies. 5. ADR is usually quicker than court litigation.

Answer 126

To make residual risks significantly smaller than inherent risks.

Answer 127

The risk that naturally occurs to an organization before the consideration of any mitigation actions / controls.

Answer 128

The portion risk that still remains after action has been taken to reduce inherent risks.

Answer 129

1. The nature of the business - On a practical level, business that operate in a mainly cash environment experience a higher susceptibility to certain fraud risks. 2. The environment and jurisdictions that the business operated in - In certain countries around the world, paying bribes is a known cost of doing business, if an entity has operations in these countries, the risks of bribery and corruption become elevated. 3. The business culture and staff - The ethics and the values of the organization and its employees. 4. The known effectiveness of existing internal controls - It's important to remember that no system of internal controls can fully eliminate the risk of fraud, but well designed and effective controls can deter it.

Answer 130

Manual or automated processes that prevent something bad from happening before it occurs. An example would be a user ID to access the payroll register. The used ID limits access to only those people who need to have access.

Answer 131

Manual or automated processes that are designed to detect something bad that has already occurred. An example is a report on all vendors who had payment info changed within the last month. This could detect if any unauthorized changes had taken place.

Answer 132

1. Identify risk 2. Address the likelihood of each risk 3. Respond to likely risks 4. Document & discuss findings.

Answer 133

1. Occupational fraud- When an employee defrauds their employer. 2. External fraud - Frauds committed against an organization by outsiders (vendors, hackers, suppliers). 3. Individual fraud - Individuals are the victims.

Answer 134

The use of one's employment to misappropriate cash or other assets. Also known as internal fraud or internal fraud.

Answer 135

1. Corruption. 2. Asset misappropriation. 3. Fraudulent Financial Statements.

Answer 136

1. Bribery 2. Bid rigging 3. Kickbacks

Answer 137

The theft of cash from a company before its recorded in the books.

Answer 138

The theft of funds while they are in transit. Cash may be stolen while one transit from one individual to another, or while on transit to the bank.

Answer 139

For this to work, the fraudster must have control over both the accounts receivable records and the bank deposits. The fraudster steals a customer's incoming payment on account. Then, the fraudster steals a second customer's payment on account to cover the first outstanding account balance. And so on.

Answer 140

1. Placement - Depositing the funds into a financial institution. 2. Layering - Moving money, typically from one account to another, to disguise the initial deposit. 3. Integration - Making the funds available for use.

Answer 141

Individuals and businesses. It provides for the complete liquidation of all of the debtor's assets and complete elimination of all of the debtor's obligations.

Answer 142

Municipalities.

Answer 143

Businesses and some individuals. Different from Chapter 7 because there is not a complete discharge of all debts but rather the court focuses on developing a payment plan that will satisfy the creditors.

Answer 144

Farming and Fishing businesses.

Answer 145

Individuals with above-average income.

Answer 146

Foreign parties, but they obtain access to the US courts.

Answer 147

1. Concealment of assets - Not making known the assets that you possess, ultimately defrauding creditors who have claims. 2. Fraudulent Conveyances - Asserts of the party filing bankruptcy were conveyed to other parties prior to the bankruptcy filing. 3. Petition mills - Bankruptcies are filed in massive numbers. 4. Multiple filing schemes - Bankruptcies are filed in different jurisdictions.

Answer 148

They both typically involve setting up a company, collecting money from customers, not paying vendors, and then filing for bankruptcy.

Answer 149

Bust-out schemes typically involve companies that are very short-lived, they are often premised on financial statements fraud. Bleed-out schemes tend to take a little longer, something like the depletion of a pension funds, often takes time to do.

Answer 150

Concealment of assets.

Answer 151

1. Assessment - The seriousness of the matter is considered, as well as the urgency of performing the digital image and processing. Should also consider the sophistication of the fraud scheme. 2. Collection - How data is collected determines future admissibility. This step includes taking photographs and providing a written description of where the evidence was found and the condition it was in. 3. Examination - Consider whether you have encrypted or non-encrypted devices. If encrypted, you need to consider how you will go about obtaining the encryption key. 4. Analysis - Examine system log files, when was it accessed and by who. Also want to see if any other devices were connected to the device under investigation. 5. Reporting - Provide a factual summary of activities and steps taken, including the chain of custody.

Answer 152

1. Tax Returns. 2. Bank & brokerage statements. 3. Credit card statements. 4. Personal financial statements. 5. Loan agreements. 6. Insurance policies. 7. Internet services. 8. Online search firms.

Answer 153

Promises workers a specific monthly benefit at retirement. The amount of the benefit is known in advance, typically a formula that's imbedded in the plan documents that lays out how the benefit is calculated, typically a function of age, earnings over course of employment, and number of years of service the individual has given to the company. (etc. 1% of last year's salary x number of years of service). Pensions.

Answer 154

The contribution is defined, but the ultimate benefit is not. Typically relates to savings plans, 401ks, ESPOS, etc.

Answer 155

Employee Retirement Income Security Act. A federal law. Covers private investment plans. States that it supersedes any and all state laws that relate to any employee benefit plan.

Answer 156

Quantitative or qualitative statements that are included or excluded from an entity's financial statements that cause the financial statements to portray financial position, results of operations, and cash flows in a manner that is not consistent with the entity's underlying financial position, results of operations, and cash flow.

Answer 157

The absence of a reasonable level of care that is expected of persons in similar situations. A transposition error, for example, can lead to ordinary negligence. No intent to decieve.

Answer 158

Due professional care was not exercised. Those charged with preparing the financial statements exhibited a reckless disregard for the duty owed to the known users of the financial statements. (Failing to make a material accrual). Didn't intend to deceive.

Answer 159

Extreme negligence. No intent to deceive.

Answer 160

When companies intentionally provide misstated information with the intent to deceive users.

Answer 161

Improperly recognizing revenue and overstating assets.

Answer 162

1. Complex organizational structure - Generally speaking, the more complex the organizational structure is, the higher susceptibility of financial statement fraud. 2. Weak governance structure - Whenever you have weak governance or there are weak control processes, the company opens itself up for financials to be misstated. 3. Complex third-party transactions - The more complex the transactions are, the more likely that hey might not be understood or misrepresented in the financials.

Answer 163

1. Aggressive management style - High importance on operating targets, a culture of results first and people second. Increases likelihood of aggressive practices and financial fraud. 2. Inadequate personnel practices.

Answer 164

1. Unusual accounting practices - If a practice is not following any type of reporting framework (GAAP, IFRS). 2. High frequency of financial statement restatements. 3. Unusual transactions recorded at year end. 4. Misreported or unrecorded transactions.

Answer 165

1. Frequent transfers among entity bank accounts - Particularly if the purposes for the transfers are not explained. 2. Unusual transactions in the records - Off-shore bank accounts for example, especially if unusual for the entity. 3. Frequent of unusual related party transactions.

Answer 166

1. Abnormal declines in demand for a company's products or services. 2. Any type of worsening company operations or financial conditions (lawsuits against entity, health concerns against products an entity releases).

Answer 167

1. Public document reviews & background investigations. 2. Interviews of knowledgeable persons. 3. Use of confidential sources. 4. Analysis of physical and electronic evidence. 5. Physical and electronic surveillance. 6. Undercover operations. 7. Nontraditional analysis of financial transactions. 8. Ratio analysis. 9. Vertical & horizontal analysis.

Answer 168

The "ex ante" approach takes damages and discounts them back to the date of the bad act, and then those damages are brought up to the date of trail using a pre-judgment interest rate. This relates to time value of money.

Answer 169

Takes past losses and brings them forward to the date of trial using a pre-judgment interest rate, and then projected losses beyond the date of trial are brought back to the date of trial via a present value calculation

Answer 170

A concept introduced by the US Supreme Court. All info that may be available through the present time should be considered when calculating damages. (significant growth in the industry after the date of the bad act).

Answer 171

1. Demand existed for the patented product during the period of infringement. 2. Acceptable non-infringing substitutes were not available to satisfy demand during the period of infringment. 3. The patent owner possessed the manufacturing and marketing capacity to have supplied the patented product to customers who purchases the infringing product. 4. The amount of profit the patent holder would have made.

Answer 172

Typically pertain to balance sheet measures. If the acquirer is acquiring things like inventory or working capital or net assets, the M&A agreement may contain a contractually defined purchase amount known as the "peg". Typically these amounts are defined before the transaction closes, and there are provisions written into merger and acquisition agreements that provide for a true-up post-closing, purchase price adjustments.

Answer 173

Typically pertain to balance sheet measures. If the acquirer is acquiring things like inventory or working capital or net assets, the M&A agreement may contain a contractually defined purchase amount known as the "peg". Typically these amounts are defined before the transaction closes, and there are provisions written into merger and acquisition agreements that provide for a true-up post-closing, purchase price adjustments.

Answer 174

A provision that is often used to bridge the gap in value between what the buyer wants to pay and the seller wants to receive. Over a period of time, the seller may be able to receive additional purchase consideration based on the performance of the acquired company post-transaction.

Answer 175

Clauses incorporated into a M&A agreement that allow for the termination of a merger or acquisition prior to closing in the event that there is a material change to the target's business operations or assets.

Answer 176

1. Relative value model. 2. Absolute value model. 3. Option pricing model.

Answer 177

Estimates the value of something by observing prices of similar things. Referred to as observational techniques or methods.

Answer 178

Mathematically calculate the present value of an asset's expected future cash flows. A stock or a bond that pays interest or dividends over time and there's a value to can be assigned to that particular security based on the present value of those expected future cash flows coming from the stock or the bond/.

Answer 179

Complex form of absolute value model that values enterprises still needing substantial development to teach their economic potential. A start-up entity that has one product that is starting to be developed and that may or may not succeed.

Answer 180

1. Income approach. 2. Market approach. 3. Asset approach.

Answer 181

Looks at a set of expected cash flows or income out into the future that is discounted to present value and that present value under the income approach represents the value of the asset.

Answer 182

Estimates the value of something by observing prices of similar things.

Answer 183

The value of a firm is determined by considered the value of individual assets. They are added to together. To the extent there are liabilities, they are considered. And the net represents the net asset value (firm value).

Answer 184

Ri = Rf + Bi (Rm - Rf) Ri = Expected equity return of the asset Rf = Return on a risk free asset (such as a government bond) Bi = Beta (how a particular security moves in relation to the rest of the market) Rm = Return on the market portfolio

Answer 185

What did it takes in terms of costs to build up that asset, that is the value. Often used with intangible assets.

Answer 186

1. Discounted cash flow approach - Looks at the cash flows over a period of time, variability in the cash flows is expected. 2. Constant growth models - Value is derived using a single period cash flow metric divided by a capitalization rate (discount rate - an expected growth rate). Variability not expected, constant growth is expected.

Answer 187

1. Guideline public company method - Public companies are identified and the data from those companies is used to derive the pricing multiples that are then brought back to value to subject company. 2. Guideline company transaction method - Data is typically obtained from databases (which show company transactions) and used to come up with pricing multiples that then can be applied to the subject company.

Answer 188

The value of a company including it's tangible and intangible assets.

Answer 189

Assumes that a firm will continue to operate as a business enterprise. (Won't file for bankruptcy).

Answer 190

Assumes a firm will no longer operate and will take steps to maximize net proceeds from selling off its assets. Assumes company will go out of business, that it will sell its assets, but it will take whatever time is necessary to expose those assets to the marketplace to achieve the maximum value.

Answer 191

Assumes that a firm will no longer operate and that the assets will be sold quickly, even if the proceeds are not maximized. A "fire-sale".

Answer 192

1. The valuation may only be used for it's stated purpose. It can't be used for a different purpose. If it's for litigation, the client can't take that valuation and use it for financing purposes. 2. We as valuation analysts are not auditing the financial information that is provided. We are accepting financial info that is provided to us as is. 3. We are not providing opinions on the achievability of forecasts. We may get a forecast in a valuation, we may use it and do some procedures to rely on it, but we are not providing an opinion on whether or not it will be achieved. 4. Environmental obligations. 5. We are not trying to assess the effects of future possible legislation. (Changes in tax laws etc., that might affect valuation). 6. We are relying on management's representations. Similar to us saying we are not auditing the info we were provided.

Answer 193

1. Litigation consultant. 2. Expert witness. 3. Mediator. 4. Arbitrator. 5. Bankruptcy trustee.

Answer 194

1. Expert consultants are not subject to discovery and they do not testify in court.

Answer 195

1. There was a duty to exercise professional care. 2. That duty was breached. 3. There needs to have been a causal relationship between that breach of duty and whatever the resulting injury may be. 4. There must be an actual loss or damage.

Answer 196

1. To have professional liability insurance. 2. Obtain indemnity from the retaining client or attorney (within an engagement letter).

Answer 197

1. Arbitration - Essentially where the neutral third party ultimately makes a decision as a trier of fact on the items in dispute. 2. Mediation - A negotiation, a little more informal than an arbitration.

Answer 198

1. It saves money. Litigation is very expensive. 2. Stress, anxiety (etc.), that litigation can produce can be minimized by ADR. 3. The ADR process can help to protect privacy. Litigation in federal and state courts is a public affair. 4. ADR can build relationships. Litigation can be very destructive and it can turn business partners into enemies, ADR can bring he parties together. 5. ADR is usually quicker than litigation.

Answer 199

1. Identifying evidence. Essentially making requests for information that may assist in the divorce proceeding. 2. Analyzing the evidence of information that is received. 3. Serving as a consultant to the attorney who is handling the divorce for one of the parties. 4. Performing business valuation services. Particularly when there is a business or business interest that is subject to division, a valuation is required. 5. Performing asset tracing services. 6. Searching for hidden assets. 7. Determining Income. 8. Serving a an expert witness. 9. Serving as an arbitrator. Some forensic accountants may also act as mediators. Might also be involved in calculating child support payments.

Answer 200

1. Evaluating whether they have the right expertise to take on the matter. Includes professional competence and whether they can appropriately communicate findings in the matter. 2. Whether they can uphold integrity and objectivity. 3. Whether they have sufficient staffing to undertake the project. 4. Timing. Divorce matters often have deadlines and are subject to court schedules.

Answer 201

9. This means that all assets acquired during marriage are considered marital assets.

Answer 202

1.Tax returns. 2. Bank and brokerage statements. 3. Credit card statements. 4. Personal financial statements, 5. Loan agreements. 6. Insurance policies. 7. Internet services. 8. Online search firms.

Answer 203

1. Debt relief orders (DRO). 2. Qualified domestic relations orders (QDRO). Court order that directs the pension plan to award a portion of a participant's pension benefits to the employee's former spouse. 3. Qualified court order (QCO). 4. Military order (MO).

Answer 204

1. Direct - Can be believed without inference. 2. Circumstantial - Depends on credibility and inferences of witnesses.

Answer 205

1. Testimonial - testimony by a witness who makes assertions, facts. 2. Real or physical - Real or tangible items that are considered indisputable. 3. Demonstrative - Tangible evidence that illustrates a matter of significance.

Answer 206

1. It must be relevant. Not unfairly prejudicial. 2. It must have a proper foundation. It must be reliable, and must have been obtained though a proper chain of custody. 3. It must be in the proper form. IT needs to be properly authenticated. 4. No exceptions can apply. Exceptions can include that the evidence is unduly prejudicial, threatens to confuse the jury, causes an unnecessary delay, or wastes time.

Answer 207

1. Attorney-client. The most important for forensic practitioners. U.S. v. Kovel. 2. Marital. Communications between spouses. A valid marriage must exist at the time. 3. Physician-patient. 4. Psychotherapist-patient. 5. Priest-penitent. 6. Against self-incrimination. Plead the 5th. 7. Law enforcement. Informants identity remaining secret. *Accountant-client privilege is not recognized.

Answer 208

1. Daubert v. Merrell Dow Pharmaceuticals. 1993. 2. Kumho Tire Co. v. Carmichael. 1999 product liability case. Case rested solely on the opinion of a tire expert. First time an expert's opinion who was not a scientific expert was considered. 3. General Electric Co. v. Joiner. 1997 product liability.

Answer 209

Authentication of evidence. Before a doc can be admitted into evidence, it must be found to be authentic, substantially in the same condition it was when it was found. In the case of a written statement' "Did you write this, did you sign this?"

Answer 210

In fraud cases, original documents (best evidence) must be presented if it is claimed they were forged or altered.

Answer 211

1. Chapter 7 - Individuals and businesses. Provides for complete liquidation of all debtor's assets and complete elimination of all of the debtor's obligations. 2. Chapter 9 - Municipalities. Cities, towns going bankrupt. 3. Chapter 11 - Businesses and some individuals. Not the same as Ch.7, it's not a complete discharge of all debts, the court rather focuses on payment plans to satisfy creditors. 4. Chapter 12 - Farming and Fishing Businesses. 5. Chapter 13 - Individuals with above - average income. "Means-tested" income. Also different from Ch. 7. The court may discharge some of the debts and create a payment plan for the rest. 6. Chapter 15 - Foreign parties. A party to the bankruptcy proceeding is located outside of the United States but they obtain access to the U.S. courts.

Answer 212

1. Initial filing. 2. A trustee is appointed to oversee the case. 3. The trustee will then convene a meeting of the creditors. In that meeting, claims by the creditors are brought forward. 4. Liquidation of debts and payment plan is developed. 5. Ultimately when the bankruptcy is resolved there will be a full or partial discharge of the debts (depending on the type of bankruptcy proceeding).

Answer 213

1. Concealment of assets. 2. Fraudulent Conveyances. 3. Petition mills. 4. Multiple filing schemes. 5. Bust-outs and Bleed-outs.

Answer 214

Both schemes involve setting up a company, collecting money from customers, not paying vendors, and then filing for bankruptcy.

Answer 215

Typically involve companies that are very short-lived. The comp may be established following a suspicious buyout where someone buys all or some of a particular company. They are often premised on financial statement fraud being presented to vendors to obtain credit. Could have fictitious credit references. Usually very low or no A/R, similarly, low inventories, because the central feature of the bust-out is using credit that's obtained to buy inventory, and then sell the inventory at a very significant discount, then leave the vendor's without payment. Bust-outs typically rely on part-time employees and might have a history of business failures.

Answer 216

Takes longer than bust-out schemes. A new parallel company is established, usually via a leveraged buyout (a recent change in ownership). Pension funds will be depleted. Repayment of loans to investors takes priority over the payment of loans to other creditors. There can be changes in the cash-flow patterns as well as changes in the payment patterns.

Answer 217

States that the court may order the examination of any entity (does not need to be a debtor or a creditor in the bankruptcy proceeding), also provides that an attorney with an interest in the case can issue subpoenas.

Answer 218

Also known as internal fraud or employee fraud. 3 main types: 1. Corruption. Employee commits acts that are not in the best interest of the organization because of some type of influence that affects the employee's conduct (a purchaser might purchase goods from a friend or family at a premium, because of influence from that relative). 2. Asset misappropriation. The improper conversion of an asset for personal use. Does not require that an employee actually steals an asset, might just borrow or misuse it for personal reasons. Cash is subject to the highest risk of misappropriation, since it can be easily converted to other assets. The 2 most common types of misappropriation are skimming or revenue receipts and fraudulent disbursements. 3. Fraudulent financial statements. Revenue recognition fraud is the most common type.

Answer 219

1. Opportunity. Weak internal controls, or a lack of oversight of supervision by management, provide an opportunity to perpetuate a fraud. 2. Rationalization. The justification by the individual for their fraudulent actions. "I'm only borrowing the asset", "I haven't received a raise", "It's not a lot of money". 3. Pressure. Exists when an employee has significant financial problems.

Answer 220

1. Bribery. The offering, giving, receiving, or soliciting, any item of value, to influence an other person or official. 2. Bid rigging. The manipulation of a bidding process so that the outcome / reward is secretly predetermined, closely related to kickbacks. Bid suppression, rewarding someone for not bidding. Complementary bidding, rewarding bidders for entering fake bids that will clearly be rejected. 3. Kickbacks. A form of negotiated bribery, a commission is paid to the bribe taker in exchange for services rendered or some type of business advantage provided.

Answer 221

1. Sales skimming schemes. The theft of cash from a company before it's recorded on the books. (stealing cash at time of sale and not recording the sale). 2. Cash transmission schemes. Theft of funds while in transit (from one individual to the next or while on it's way to the bank). 3. Accounts receivable fraud. Lapping is the most common. Fraudster steals an income payment on account, then a second customer's payment is stolen to cover the first customer's balance, and so on. 4. Improper credits to customer accounts. Credit is granted to unqualified customers due to improper influence. 5. Improper write offs. Fraudster executes write off without authorization or forges an authorization.

Answer 222

1. Improper purchases. The purchase is not made in accordance with company polices and procedures (collusion, override of controls, etc.). 2. Misappropriation of petty cash. 3. Abuse of company credit cards and expense accounts. 4. Unauthorized payments. 5. Theft of company checks. 6. Payroll fraud. Improper hiring, improper changes to personnel files (resulting in unauthorized pay raises or benefits), improper reporting of company activities. 7. Production cycle frauds. Inventory-related, employees might be able to steal raw materials.

Answer 223

1. Improper purchases. The purchase is not made in accordance with company polices and procedures (collusion, override of controls, etc.). 2. Misappropriation of petty cash. 3. Abuse of company credit cards and expense accounts. 4. Unauthorized payments. 5. Theft of company checks. 6. Payroll fraud. Improper hiring, improper changes to personnel files (resulting in unauthorized pay raises or benefits), improper reporting of company activities. 7. Production cycle frauds. Inventory-related, employees might be able to steal raw materials.

Answer 224

1. Short shipments. Shipping incomplete orders but billing as it it's complete. 2. Balance billing. Vendor bills company for balance on account rather than invoice for specific items. 3. Fraudulent cost-plus billing. Change orders. Adding on to an agreed upon price for services. 4. Supplying substandard goods.

Answer 225

Over 15 million.

Answer 226

1. The procurer. Purchases identity info or obtains info from hacking or phishing schemes. 2. The document forger. Specialized in check washing and making false ID cards. 3. Sales manager. May sell some or all of the stolen ID info. 4. The shopper. The one who goes out and passes stolen checks and uses fake or stolen credit cards. 5. The money launderer. Puts the groups money into the financial system.

Answer 227

Process of placing illegally obtained funds into the financial system by making the funds appear to come from a legitimate source. The goal of money laundered is to make it appear as though the funds have come from legitimate sources.

Answer 228

1. Placement. Depositing the funds into a financial institution. Smurfing is common, breaking large deposits of money into smaller increments lower that $10,000 each. 2. Layering. Moving money to disguise the initial deposit. 3. Integration. Making the funds available for use. Off-shore accounts often used.

Answer 229

1. Investigative Services. 2. Litigation Services.

Answer 230

1. Expert Witness. Rendering an opinion before a trier of fact based on the member's expertise rather than his or her knowledge of the facts or events. 2. Litigation Consultant. Provides advice about the facts, issues, and strategy of the matter but does not testify before a trier of fact. 3. Other. Serves as a trier of fact or an expert. a. Arbitrator. b. Mediator. c. Bankruptcy Trustee.

Answer 231

1. Computation of economic damages. 2. Punitive damage studies. 3. Professional standards analysis. 4. Valuation of businesses, pensions, and intangibles. 5. Fraud prevention, detection, and investigation. 6. Bankruptcy consultant, trustee, and examiner. 7. Tax analysis. 8. Marital dissolution assessment and analysis. 9. Contract cost and claims analysis. 10. Historical results analysis.

Answer 232

1. Introductory information - Basic facts of engagement. 2. Description of services - What will be done. 3. Scope of services - How we are going to do the job. 4. Conflicts of interest - Stating which conflicts exist if any, or stating that no conflicts exist. 5. Rights and duties - Establishing rules and responsibilities. 6. Termination or expiration provision - Issuance of a report. 7. Privacy, confidentiality, ownership - What type of communication is preferred. 8. Dispute resolution - ADR or litigation. 9. Choice of law provision - Which body governs the engagement. 10. Limitations of liability and damages. 11. Fees - How the fees will be structured. 12. Other - Timeline, staff to be used. Not all of these need to be included in each engagement letter. These are essentially template items.

Answer 233

1. Uncompensated use of the expert's name and reputation - Issue a report for financial statement purposes only, and then it gets used for litigation, with your name on it. 2. Preliminary opinions without being retained. 3. Stealing the expert's opinion. 4. "Conflicting out" the expert - One party retains experts so that another party can't retain them. 5. Late payments and non-payments. 6. Attempting to shape the expert's opinion or testimony - Attorney might want you to analyze something a certain way or make assumptions without a reasonable basis. 7. Withholding information from the expert. 8. Rush cases - Lawyers may overstate the info that is available and understate the amount of time allowed, causing the expert to rush, leading to errors or flawed wording / theories. 9. Harassments at depositions. 10. Pressure to act in unethical ways - WIthholding info from the other party.

Answer 234

Not only is a certain amount of earnings management allowed, it is even expected by the marked given the desirability of management to make it's company appear as financially profitable as possible. Reporting frameworks such as GAAP, allow for choices in the application of accounting practices, allowing management the ability to select from various methods when computing earnings. Management can manage earnings by timing business activities or recording business activities selectively, and still be in compliance with their reporting framework. Earnings management becomes fraud when companies intentionally provide misstated info with the intent to deceive users.

Answer 235

1. Sham sales. Seem as if they occurred, but have not met the revenue recognition criteria. Sometimes, no sale at all. Sometimes an arrangement between the buyer and seller to return the items after the balance sheet date. 2. Premature revenue recognition. 3. Improper cutoff of sales. Holding books open so the following year's sales can be recorded in the current year. Sales did exist, just reported incorrectly. 4. Recognition of conditional sales. Common on sales when a customer pays in installments. Profit is supposed to be recognized as the payments come in. 5. Misstatement of percentage-of-completion contracts. Percentage of completion method requires several estimates, opening up the potential for fraud. 6. Chanel stuffing. Involves making unauthorized shipments. A company will ship more productions than their distribution channel permits, typically more goods than the customer ordered. The reason is to increase sales and A/R. Can also occur by shipping defective or partially completed merchandise, but billing for the full product. 7. Consignment sales. Product is owned by consignee and sold by consignor. Fraud occurs when consignor records revenue when goods are shipped to consignee before the goods are sold. 8. Bill-and-hold sales. Sales which are billed, but goods have not been shipped to the buyer.

Answer 236

1. Commonly misstated assets. a. A/R due to fictitious sales or re-dating (extending due date). b. Inventory. c. Property, plant , and equipment accounts. Capitalizing amounts that should be expenses (repair and maintenance, research and development) 2. Embezzlement or misappropriation of assets can lead to asset overstatements. 3. Kiting and lapping can lead to overstatements on financial statements. in kiting, the suspect writes a check on a bank account, with not enough funds in the account the honor the check, next the suspect deposits the check into another bank account, the bank realizes, the suspect has stolen the funds. 4. Ponzi schemes create fictitious assets. Taking money from investors, and using funds for alternative purposes, more investors then begin investing. 5. Assets can be misstates by understating their bases. Often the case for good will and depreciable assets. 6. In divorces, assets may be purposely understated.

Answer 237

1. Understatement of expense often occurs at the end of an accounting period. 2. 3 basic approached to understating expenses. a. Failure to record accrued expenses. Likely lawsuits, etc. b. Misclassification of expenses as assets. Often an area where judgment is involved. c. Undervaluation of expenses. 3. Liabilities can be overstated when companies establish cookie jar reserves. Recording contingent liabilities that aren't real, therefore, the company can book revenue in a subsequent period when the write off the contingency. 4. Other methods to commit fraud include off-the-book arrangements and inappropriate financial presentation. Enron, off balance sheet financing.

Answer 238

1. Complex organizational structure. 2. Weak governance structure. 3. Weak internal control processes. 4. Complex third-parts transactions.

Answer 239

1. Aggressive management style. 2. High dependence on operating performance. 3. Inadequate personnel practices.

Answer 240

1. Unusual accounting practices. 2. High frequency of financial statement restatements. 3. Unusual transactions recorded at year-end. 4. Misreported or unrecorded transactions.

Answer 241

1. Frequent transfers among entity bank accounts. 2. Unusual transactions in records. 3. Unusual transfers to offshore banks. 4. Frequent or unusual related-arty transactions.

Answer 242

1. Weak (or weakening) financial condition. 2. Worsening company operations. 3. Worsening industry and conditions.

Answer 243

1. Board of directors - Highest level of management. Responsible for establishing broad corporate polices and objectives. Includes inside directors as well as outsiders. Usually about 9 members. 2. Audit committee - Sub-group of the board charged with overseeing financial reporting and disclosure, including appropriateness of accounting policies. Must be independent outside directors and at least one member must be a financial expert (such as a CPA). 3. Internal auditor - Examines financial position and results of operations of the comp. Internal to the organization. 4. CEO and CFO - Ability to set tone at the top relating to fair presentation of financial statements. Required under sarbanes oxley to file reports with the SEC certifying that the financials are fairly presented. 5. External auditor - Serves as a preventive and detective method of preventing fraud. Required to brainstorm how fraud could be committed and how internal controls could allow for it to happen. Audit is then planned and performed with these concerns in mind. 6. Public oversight orgs - SEC, PCAOB, GASB, etc. Protects the public.

Answer 244

1. Public document reviews and background investigations. May be used to discover insider trading activities, related-party transactions, or businesses owned by the subject of the investigation that should be looked in to. 2. Interviews of knowledgeable persons. 3. Use of confidential sources. 4. Analysis of physical and electronic evidence. 5. Physical and electronic surveillance. 6. Undercovers operations. Usually done by law enforcement, not the forensic accountant. But the forensic accountant can recommend the client use this technique. 7. Nontraditional analysis of financial transactions. Round dollar entries, cut-off procedures, reversals / restatements, ratios. 8. Ratio analysis. 9. Vertical and horizontal analysis.

Answer 245

1. Civil resolution (court). 2. Alternative dispute resolution. a. Negotiation. b. Arbitration. c. Mediator. d. Other.

Answer 246

1. Filing of a complaint. Pleadings, etc. 2. Serving defendant(s). 3. Scheduling conference. 4. Discovery and investigation. Exchange of info between parties. 5. Pre-trial motions. 6. Settlement of pre-trial conference. 7. Trial. 8. Post-trial motions. 9. Appeal.

Answer 247

A litigant asserting a claim for relief may join as many claims as she or he has against an adversary, regardless of subject matter. Multiple parties can be brought in to ensure a complete result in the case.

Answer 248

For any person who has a material interest in the case if in his or her absence, complete relief cannot be accorded, or his or her interest is such that proceeding without him or her would be prejudicial.

Answer 249

Applies to parties who may be joined when they are considered to be proper parties.

Answer 250

A special type of joinder for which a defendant can bring in a 3rd party who may be liable for the plaintiff's claim.

Answer 251

1. Motion to dismiss. a. Lack of jurisdiction over subject matter or person. b. Improper venue. c. Insufficiency of process or service of process. d. Failure to state a claim upon which relief may be granted. e. Failure to join a necessary party. 2. Motion for judgment on pleadings. Where the parties would say that the complaint, or the response to the complaint (counter-claim), that the court should make a judgment simply based on the pleadings. 3. Motion for summary judgment. Asks court to dismiss simply on everything that has been argued to that point in time.

Answer 252

1. Legal remedies. a. Monetary damages. When calculating lost profits, for example, we are addressing the concept of monetary damages. 2. Equitable remedies. a. Injunctions such as restraining orders. b. Orders for specific performance. 3. Tort remedies. Non-contract matters (personal injury claims).. a. Compensatory damages. b. Nominal damages. c. Punitive damages. Amount added over and above compensatory damages, to punish the wrong-doer. 4. Provisional remedies under FRCP 64 (Federal Rules of Civil Procedure). a. Attachment. b. Garnishment. c. Replevin.

Answer 253

A judicial order that restrains from beginning or continuing an action, or that compels a person to carry out a certain act.

Answer 254

1. Arrest or summons issued. (In place of a complaint in civil proceedings). 2. First appearance. 3. Preliminary hearing. 4. Filing of information or grand jury indictment. 5. Discovery and pre-trial motions. (Exchange of info / evidence between parties). 6. Trial. 7. Sentencing. 8. Post-conviction remedies. (Appeals).

Answer 255

1. Computer Forensics - Focuses on obtaining evidence from computers. 2. Network Forensics - Focuses on obtaining evidence from computer and storage networks.

Answer 256

1. Protecting the crime scene and evidence from alteration. 2. Deciding what evidence to collect. 3. Storing and cataloging evidence collected. 4. Maintaining a secure and documented chain of custody. 5. Interacting with other investigators on the scene.

Answer 257

1. Assess a. Seriousness. b. Urgency. c. Sophistication. d. Whether to power down the device. 2. Collect a. Secure and document the site. b. Log evidence (relevant serial numbers). c. Secure evidence bags. d. Take photographs. 3. Examination a. Encrypted vs non-encrypted devices. b. Looking for countermeasures. c. Securing a forensic image (bit-by-bit image: original copy, client copy, counsel copy, working copy). 4. Analysis a. Booting a disk copy vs mounting a disk copy. b. Examine system log files. c. Using indexing to locate keywords. d. Recover deleted files. 5. Reporting a. Factual summary of activities and steps taken. b. Evidences maintenance of chain-of-custody.

Answer 258

1. Ability to make an image of a target computer. Not the same as a copy and paste. A forensic image is preserving the inherent metadata (info housed within the file) of the file. Goal is to be able to authenticate the data and render it admissible in court. 2. Recover passwords. 3. Recover deleted files. 4. Recover data from slack space. 5. Analyze hidden contents, metadata, logs, and email headers. (Not accessible from normal computers). 6. Analyze unallocated storage space. 7. Index large numbers of files. 8. Connect to databases and accounting systems. 9. Log examiner activities and create reports.

Answer 259

1. Data analysis software. Most used by auditors. Can create test data to test controls. 2. Network security evaluations software. 3. Operating system and database system evaluation software. 4. Software-testing tools.

Answer 260

1. Sample extractions. 2. Sophisticated data queries. 3. Completion checks. 4. Duplicate checks. 5. Missing sequence identification. 6. Reasonableness checks. 7.Statistical analysis and calculations. 8. Test application and logic controls.

Answer 261

1. Consider backup drives. If the organization's servers are not cloud-based, they must exist somewhere in a physical form, and likely, those servers have a back-up source for disaster recovery purposes. 2. Cloud drives. 3. Email messages. 4. Printouts.

Answer 262

Integrated Automated Fingerprint Identification System. Managed by the FBI. Uses include; some employment checks, many criminal investigations, some firearm purchases.

Answer 263

Financial Crimes Enforcement Network. Focuses on money laundering and related crimes including terrorism and narcotics. Receives Suspicious Activity Reports (SARs) from banks and other FIs.

Answer 264

National Law Enforcement Telecommunications System. Criminal Justice Network connecting 50 states and federal agencies.

Answer 265

National Crime Information Center. Managed by the FBI. Provides real time searches of theft reports, warrants fugitives, etc.

Answer 266

Guidance is authoritative if issued only after following a process that includes deliberation in meetings open to the public, public exposure of proposed statements, and a formal vote by the appropriate body designated by the AICPA to issue such guidance.

Answer 267

Has been granted the authority by the AICPA to issue guidance and profession standards for forensic and valuation series?

Answer 268

1. Preface. 2. Members in Public Practice. 3. Member in Business. 4. Other Members

Answer 269

Independence.

Answer 270

Perform a conflict of interest check.

Answer 271

1. Offer a public settlement to the member. 2. Issue a confidential letter of corrective action. 3. Present the case before the Joint Trial Board.

Answer 272

AICPA members who provide services to a client as part of a litigation or investigation engagement.

Answer 273

All AICPA members who perform valuation services, litigation services, personal financial planning, tax, or accounting engagements.

Answer 274

1. Litigation engagements - An actual or potential legal or regulatory proceeding before a trier of fact or regulatory body where we as forensic accountants are retained as an expert witness, consultant, natural, mediator, or arbitrator in connection with a dispute between parties. (Not limited to formal litigation, ADR as well). 2. Investigation engagements - A matter conducted in response to specific concerns of wrongdoing in which the member is engaged to perform procedures to collect, analyze, evaluate, or interpret certain evidential matter to assist stakeholders (the client) in reaching on the conclusion on the merits of the concerns.

Answer 275

When the engagement involves estimating the value of a subject interest including a business or business ownership interest, a security, or an intangible asset.

Answer 276

1. Practice aids. 2. Special reports. 3. White papers. 4. Other aids and publications.

Answer 277

1. Practice aids. 2. Special reports. 3. White papers. 4. Other aids and publications. These do not represent official pronouncements by the AICPA, they don't follow the formal approval process as required for authoritative guidance.

Answer 278

1. SSFS 1. 2. VS Section 100.

Answer 279

Absolute value model. This is because it applies mathematical techniques and calculations to deriving the ultimate value. This is done through the analysis of cash flows, particularly the timing of those cash flows, as well as the analysis of the required rate of return that evaluates the risk and uncertainty that goes with those particular cash flows.

Answer 280

Both the absolute value model and relative value model. This is because of the fact that the asset approach required a restatement of each asset on the balance sheet. The restatement of a particular asset, such as an intangible would require the use of an income approach (an absolute value approach) (looking at the cash flows that might be generated by that asset). However, there are other assets, such as machinery and equipment, which would require a market approach. An appraiser might be hired to assess the value of the machinery based on other similar assets in the market, which is the application of an observational or relative value model approach.

Answer 281

Relative value model. Value is calculated by assessing comparable assets.

Answer 282

1. Discounted cash flow approach. Looks at the cash flows over a period of time, expectation is that there will be variability in the cash flows. 2. Constant growth models. Under these models, the way that the value is derived is using a single period cash flow metric divided by a capitalization rate. There are hybrid models that might also be used (A discrete discounted cash flow period and then a constant growth out into the future).

Answer 283

The discounted future benefits method.

Answer 284

The capitalization of benefits method.

Answer 285

One will go out and look at transactions, and gets price multiples (maybe a price to earnings multiple or a price to EBITDA metric), that can ultimately be used to calculate the value of the subject interest.

Answer 286

1. The guideline public company method. Public companies are identified, and the data from those public companies is used to derive the pricing multiples that are then brought back to value the subject interest. 2. The guideline company transaction method. Company transaction data is typically obtained from databases, this data is then used to come up with pricing multiples which are then applied to value the particular entity. The key / challenge is to ensure that the comparable companies or transactions are truly comparable.

Answer 287

Each asset on the balance sheet is identified and valued separately. Value may be derived using either an absolute or relative value model.

Answer 288

The adjusted net method.

Answer 289

The identified value that is going to be used for a particular value.

Answer 290

The price, expressed in terms of cash equivalents (no other assets), at which property would change hands between a hypothetical willing and able buyer and able seller, acting at arms length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts. This is the standard of value that is used for taxation in the US. Often used in shareholder / partnership buyout agreements as well.

Answer 291

The value to a particular investor based on individual investment requirements and expectations. Doesn't consider any hypothetical scenarios, as does the definition of fair market value, this standard of value is looking at an actual investor's requirements and expectations.

Answer 292

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Answer 293

The value that is perceived or calculated for a company, including both it's tangible and intangible assets. Typically not used in litigation matters or in financial statement valuation.

Answer 294

1. Fair Market Value. 2. Investment Value. 3. Fair Value. 4. Intrinsic Value.

Answer 295

Assumes a firm will continue to operate as a business enterprise out into the future. Won't file for bankruptcy or other transaction that will cause the firm to go out of business.

Answer 296

Assumes a firm will no longer operate and will maximize net proceeds from selling off its assets. Assumes comp goes out of business, will sell at it's assets, and will take steps to achieve the maximum value for the assets.

Answer 297

Assumes a firm will no longer operate and assets must be sold quickly, even if net proceeds are not maximized. Fire-sale of company assets, will accept whatever they can.

Answer 298

1. Going Concern. 2. Orderly Liquidation. 3. Forced Liquidation.

Answer 299

1. The identity of the client. Who is the client that retained us and for whom the valuation is being performed. 2. The purpose and the intended use of the valuation. 3. Who the intended users of the valuation are. Beyond just who the client is. 4. Who is the subject entity, the entity being subject to valuation. 5. Who is the subject interest Which means the ownership interest subject to valuation (we are valuing a 25% ownership interest in XYZ Company). 6. The ownership control characteristics of the subject entity. 7. The degree of marketability that goes with the subject interest. 8. The valuation date. Can be different than the report date. 9. Whether it is a summary report or a detailed report. 10. The applicable premise of value. (Going concern, orderly liquidation, forced liquidation). 11. The applicable standard of value (FMV, Fair Val, investment value, etc.). 12. The sources of information that were used in the valuation. 13. Any assumptions and limiting conditions that go with the valuation. 14. The score of the work that was performed and the data that was available (including any restrictions and limitations with respect to the use of that data). 15. Hypothetical conditions that were used in the valuation. 16. If the work of a specialist (real estate appraiser, actuary for pensions, etc.) was used in the valuation, and how this work was used. 17. The valuation approaches and methods that were used. 18. Any subsequent events. 19. Any jurisdictional exceptions. 20. Representations of the valuation analyst. 21. Signature of preparer. 22. Reconciliation of how the valuation might be different under a different valuation approach (income, cost, market, etc.). 23. A statement that the valuation analyst has no obligation to update the report / calculation of value for subsequent info coming to their attention after the date of the report.

Answer 300

1. Identification of the asset being valued. 2. The valuation date. Can be different than the report date. 3. The standard of value that will be used. 4. The premise of value that will be used. 5. The intended purpose of the valuation.

Answer 301

The parameters and boundaries under which a valuation is performed. Need to be disclosed in the report as well as the engagement letter. Some typical ones would be... a. The valuation may only be used for it's stated purpose. Can't be used for a different purpose. If it's for an litigation matter, the client can't use it for financing purposes. b. Statement that we are not auditing the financial information provided, we are accepting the info we are provided with and using it. c. Provision that we are not providing an opinion on the achievability of forecast. We ay use forecasts or projections in our engagement, but not providing any opinion on achievability. d. Provisions regarding environmental obligations and liabilities. e. Provision saying we are not trying to assess the possible affects of future legislation. (Tax laws, etc., that will affect valuation), we are not trying to forecast any legislation changes, positive or negative. f. We are relying on representations that we received from management, again, we are not auditing the info we are provided.

Answer 302

Assumptions that are made for the purpose of a valuation analysis that may be contrary to actual conditions. Such as a situation where we are doing a valuation on the context of a potential acquisition, we may have a hypothetical condition where estimate the value based on the effects of things that are not in existence.

Answer 303

Setting the tone at the top. Specifically implementing a business ethics program, understanding fraud risks, maintaining oversight if fraud risk assessment, monitoring management fraud and related activities, overseeing internal controls established by management, having the ability to retain experts, providing to external auditors evidence of their active involvement.

Answer 304

The audit committee (or sometimes a risk committee or governance committee). The audit committee should be composed of independent board members and include at least one financial expert. Should meet regularly alone with the internal auditor without the presence of management. Must be proactive in overseeing fraud risk mananegment and should have an open dialogue with the external auditor.

Answer 305

1. Identify risk. Includes consideration of the nature of the business (cash-intensive), as well as the environment the business operates in (foreign country), also consider known effectiveness of existing internal controls. 2. Address likelihood of each risk. Evaluating the potential damage each risk could cause as well as the likelihood of each risk happening. Also consider the potential loss exposure, and a cost-benefit analysis, might not be worth it financially to implement a control. 3. Respond to likely risks. Plan of attack, usually based on likelihood of risks and loss exposure. 4. Document and discuss findings.

Answer 306

Having an effective fraud detection system in place.

Answer 307

1. By tip lines. Most common way fraud is detected. Mandated by Sarbanes Oxley. 2. By accident. 3. By external auditors. 4. By internal auditors or inspector generals. 5. By dedicated departments.

Answer 308

1. Develop an investigation plan based on board-approved investigation protocols. 2. Assemble an investigation team (with members from various departments). 3. Refer the case to outside investigators, as appropriate. 4. Collect evidence. (Review of internal records coupled with reviews of external records first, then interview individuals relevant to the investigation second). 5. Report results. 6. Take corrective action.

Answer 309

1. Stopping an ongoing fraud. 2. Providing support for an insurance claim. 3. Documenting a tax loss. 4. Deterring future frauds. 5. Controlling embarrassing reports in the media. 5. Discovering and impairing internal control weaknesses. 6. Punishing the guilty and obtaining restitution.

Answer 310

1. Data. As data is gathered, the theory is formed. The theory often includes who was involved, why did they do it, when did it happen, how did they do it. 2. Develop the theory and hypothesis regarding fraud. Should consider is this point, does the data I have gathered support the hypothesis? If not, go back and reconsider theory.

Answer 311

1. Testimonial. Testimony by a witness who makes assertions; facts. 2. Real or Physical. Real or tangible items that are considered indisputable. 3. Demonstrative. Tangible evidence that illustrates a matter of significance.

Answer 312

1. Protect evidence from loss or damage. If the evidence is electronic, anti-static bags are recommended to protect from data loss. 2. Collect and inventory. Preferably using serial numbering. 3. Maintain chain of custody.

Answer 313

1. Can be paper or electronic. 2. Must be catalogued, typically by using Bates numbers. 3. Comes from 4 general sources. a. Public domain (from public sources, such as social media or public records) or trash. b. Released by consent. Tax Returns for example. c. Obtained by subpoena or duces tecum. d. Obtained by search warrant. Only applies in criminal cases in the US. (In Canada, it can apply to civil cases).

Answer 314

Very basic questions intended to build a rapport and establish the purpose of the interview. Good opportunity to obeserve the interviewee's responses to basic questions, gives a baseline to compare the interviewee's responses to later questions.

Answer 315

To determine whether the subject shows deception and assess their honesty. The insured's responses are compared to earlier non-stressful questions.

Answer 316

Move on to admission seeking questions, to try to get a confession.

Answer 317

Non-confrontational questions. Used to gather information relevant to the investigation. Want to avoid complex questions.

Answer 318

Given only to suspects who show deception in the assessment questions. The aim is to identify the interviewee's knowledge or involvement in an alleged incident or scheme. "I have solid evidence that you are guilty of this". Important to note that a confession must be made freely and not under duress.

Answer 319

Given to suspects who show no signs of deception in assessment questions, and to non-suspects. Goal is to wrap up the interview, obtain any additional info that may be gained, and to gain future cooperation.

Answer 320

1. Relative value - Estimate the value of something by observing prices of similar things. Also referred to as observational techniques or methods. For example, valuing a home by evaluating the price at which other similar homes are sold. 2. Absolute value - Mathematically calculate the present value of an asset's expected future cash flows. For example, a stock or a bond that pays interest or dividends over time, the value is given tot hat security based on the present value of those expected future cash flows. 3. Option pricing - Complex form of absolute value model that values enterprises still needing substantial development to reach their economic potential. A start-up entity for example.

Answer 321

1. Income approach - Looks at a set of expected cash flows or income out into the future that is discounted to present value, and that present value, under the income approach, represents the value of the asset. 2. Market approach - Observational. Valuing an asset based on the price of similar assets, homes for example. 3. Asset approach - The value of individual assets are determined, they are added together, liabilities are considered as an offset, and the total represents the net asset value.

Answer 322

Under the income approach, there are 3 main components that need to be identified and assessed when estimating the value of an asset. 1. The amount of the expected future cash flows (this is a forward-looking exercise). 2. The timing of those cash flows. The timing can affect how we value these cash flows. 3. The interest rate. Considers risk and uncertainty. Important to understand that all 3 of those variables are estimates, they cannot be directly observed. As a formula this looks like price of asset = f(amount and timing of future cash flows, interest rate). The assessment of both the amount and timing of future cash flows is not an easy task, requires detailed projections and assumptions.

Answer 323

This explains asset returns with consideration of one risk factor, market risk. The risk above a risk-free rate (the extra return that an investor requires for investing in a risky asset).

Answer 324

Ri = Rf + Bi (Rm - Rf). Ri = Expected equity return of the asset. Rf = Return on a risk free asset. Bi = Beta. Rm = Return on the market portfolio.

Answer 325

It factors in a size premium, views smaller companies as more risky than large companies. Reflects specific risks associated with an individual company.

Answer 326

Estimates the unobservable price of an asset based on the observable price of comparable assets. Empirical (actual) evidence is used to determine pricing benchmarks of comparable assets. Don't need to use estimates like the income approach. When observing prices of assets of different sized, scaled prices may be used. Price to earnings (P/E) ratios are the most recognizable kind of scaled price.

Answer 327

The theory of the asset approach is that the value of a firm is based on the sum of the values of is individual assets. Typically used when valuing holding companies, operating firms with little to no expected profitability, or liquidating firms. Steps in the asset approach: 1. Identify all tangible, intangible, and redundant assets owned by the firm. 2. Value each asset using the income, market, or cost approach. 3. Calculate the total of the asset values and subtract liabilities.

Answer 328

1. Another party committed a wrongdoing. 2. As a result, the injured party suffered damages.

Answer 329

1. Compensatory damages. 2. Punitive damages.

Answer 330

Damages that are awarded to make an injured party whole, to put them in the same economic position they would have been in. The types of compensatory damages a CPA might be asked to evaluate are... 1. Lost profits. 2. Loss of value. Value of a business before a bad act, ad then the value after the bad act. The difference between the two is the loss of value 3. Unjust enrichment. The benefit that was received by the wrongdoer. 4. Extra out-of-pocket costs.

Answer 331

1. Lost profits. 2. Loss of value. Value of a business before a bad act, ad then the value after the bad act. The difference between the two is the loss of value 3. Unjust enrichment. The benefit that was received by the wrongdoer. 4. Extra out-of-pocket costs.

Answer 332

An additional measure designed to punish the wrongdoer / party at fault and to deter future behavior. These damages are over and above compensatory damages that are awarded.

Answer 333

1. Production Capacity. Did the company actually have the ability to produce at the level we are projecting? 2. Financing Capacity. Did the company actually have the ability from a financial level to perform at the level we are projecting? 3. Managerial Capacity. More relevant with smaller firms. Does it have the managerial workforce to enable the company to perform at our projections? 4. Technical know-how. If the lost revenue / lost profits measurements assume the company had a certain level of technical expertise, did they actually have that? 5. Market share constraints. Does the projection represent the company's market share, where they stand in their industry?

Answer 334

This approach takes damages, and discounts them back to the date of the loss / bad act. Then those damages are brought up to the date of trial using a pre-judgment interest rate. All damages are discounted to the date of loss, then brought forward to date of trial using a pre-judgment interest rate.

Answer 335

This approach takes past losses and brings them forward to the date of trial using a pre-judgment interest rate, and then projected losses beyond the date of trial are brought back to the date of trial using a present value calculation.

Answer 336

Not a method used to calculate damages, but a concept (introduced by the US Supreme Court in the 1930s), that suggests that all info that is available through the present time should be considered when calculating damages. For example, if there is growth in an industry after the date of loss / bad act, and that growth would have been applicable the the plaintiff's losses, that growth can be applied in the calculate of damages. This is in contrast to how a valuation works, where the valuation depends on the determined "valuation date".

Answer 337

The loss needs to be proximately linked to the bad act. The bad act caused the loss.

Answer 338

There needs to be some level of certainty that there were losses, doesn't have to be absolute certainty, has to be a recognition of the fact that there were damages.

Answer 339

The damages were foreseeable by the parties by virtue of the bad act, it was known that the bad act was going to result in a loss.

Answer 340

An expert opinion regarding damages needs to meet the admissibility requirements set by the court, in order to be presented as evidence at a trial.

Answer 341

1. Patent disputes. Involves utility patents, plant patents, and design patents. 2. Trademark disputes. 3. Copyright disputes. 4. Trade secret disputes.

Answer 342

1. Demand existed for the patented product during the period of infringement. 2. Acceptable non-infringing substitutes were not available to satisfy demand during t he period of infringement. 3. The patent owner possessed the manufacturing and marketing capacity to have supplied the patented product to customers who purchased the infringing product. 4. The amount of profit the patent holder would have made.

Answer 343

Alternative measure of damages (opposed to lost profits), essentially seeks to deprive the defendant of the benefit it obtained from the wrongdoing (patent infringement). These are common in intellectual property cases. Can not be duplicative of lost profits, can only claim one or the other. Plaintiff only bears the burden of proving the defendant's sales, the burden then shifts to the defendant that should be deducted from those sales (plaintiff doesn't have to measure the avoided or shifted costs).

Answer 344

1. Statutory damages. Provide a specific dollar amount based on each incidence of infringement. a. Trademark. b. Copyright. 2. Corrective advertising. a. Trademark. 3. Loss of Value a. Trademark. b. Copyright. c. Trade secrets.

Answer 345

The formal process that litigants use to obtain information from opposing parties.

Answer 346

1. Enables the parties to know before the trial starts what evidence may be presented. 2. Minimizes surprises. Both sides know what to expect. 3. Lowers transaction costs of dispute resolution. Increases the percentage of settled cases as parties may decide the to settle before trial. 4. Improves the accuracy of trials. Parties will have narrowed down their differences. 5. Filters out frivolous disputes.

Answer 347

1. Interrogatories. Can be served on a party to the lawsuit, but not on a non-party. 2. Depositions. Can be served on a party to the lawsuit, as well as a non-party by subpoena. 3. Document inspection or protection. Can be served on a party to the lawsuit, as well as a non-party by subpoena. 4. Medical exam. Can be served on a party to the lawsuit, but not on a non-party. 4. Request for admission. Can be served on a party to the lawsuit, but not on a non-party.

Answer 348

1. Excessive or improper use of discovery devices to harass, cause delay, or wear down an adversary by increased costs. 2. Stonewalling or opposing otherwise proper discovery requests for the purpose of frustrating the other party.

Answer 349

1. Excessive or improper use of discovery devices to harass, cause delay, or wear down an adversary by increased costs. 2. Stonewalling or opposing otherwise proper discovery requests for the purpose of frustrating the other party. 3. Document dumping. Providing a huge number of excess documents that the other side will have to review to drive up costs.

Answer 350

1. Mainframe computers. 2. Server hard drives. 3. Backup tapes. 4. Cellphones. 5. Jump drives. 6. Clouds. 7. DVDs. 8. Cloud.

Answer 351

1. Early and effective case management. 2. Enhancing the means of keeping discovery proportional. 3. Advancing cooperation among lawyers.

Answer 352

1. Litigation services. a. Testifying expert. Provides an opinion based on the scope of docs reviewed, and the people that were interviewed. b. Fact witness. Testifies on something that he or she directly perceived through their senses (saw, heard, etc.). c. Non-testifying consultant. Serves as a litigation consultant by advising on a strategy, retained by one of the parties in the dispute to assist that party's attorney in understanding the other parties expert report and explaining how another expert approach could be questioned. 2. Investigative services. a. Consultant in cases that do not involve actual or threatened litigation. b. Fact witness.

Answer 353

1. Accounting. 2. Auditing. 3. Investigative. 4. Criminology. 5. Digital Forensics. 6. Information Systems. 7. Economics. 8. Risk Analysis. 9. Communication. 10. Psychology. 11. Information Technology. 12. Problem Solving. 13. Legal. 14. Data Analysis.

Answer 354

1. Investigative services. 2. Fraud risk management. 3. Expert consulting. 4. Expert testimony. 5. Business valuation. 6. Alternative dispute resolution. 7. Trust services. 8. Bankruptcy.

Answer 355

The use of a forensic accountant serving as an expert witness is to provide testimony in court to assist the trier of fact (judge or jury). They do not settle disputes and do not act as advocates for the defendant or plaintiff.

Answer 356

Forensic accounting consulting engagements tend to focus on one or more areas of a dispute or investigation. Some examples are providing advice on fraud risk mitigation, giving advice on the value of an estate, or providing advice on the financial impact of mergers and acquisitions.

Answer 357

The Forensic and Valuation Services Executive Committee is the AICPA body that has rule-making authority in the area of forensic and valuation services.

Answer 358

To help practitioners implement authoritative guidance.

Answer 359

No, but they may need to justify departures. Particularly if the facts and circumstances of the practitioner's engagement are similar to which the guidance applies.

Answer 360

Occurs after the indictment has been filed. The defendant is brought before the trial court and asked to enter into a plea.

Answer 361

The initial stage of a civil lawsuit involves the filings of pleadings by the respective parties. The purpose of pleadings is to give notice to the parties and the court of the assertions of each side and to assist in the determination of the issues.

Answer 362

First appearance.

Answer 363

A simple majority.

Answer 364

An attachment is a court order allowing a court officer, such as a sheriff, to seize a debtor's property.

Answer 365

Relevancy. Relevance and it's limits is the most important article in the Federal Rules of Evidence.

Answer 366

1. It must help the trier of fact understand the evidence or determine a fact at issue. 2. It must be based on sufficient facts or data. 3. It must be the product of reliable principles and methods.

Answer 367

Lawyers have an incentive to increase discovery costs. Additionally, lawyers can include the most relevant documents in a larger group of discovery in order to force opposing counsel to expend more effort to identify the most relevant documents.

Answer 368

Objectivity only.

Answer 369

A conclusion of value of calculated value.

Answer 370

AICPA Code of Professional Conduct.

Answer 371

All of the above may be considered subject interests under Statement on Standards for Valuation Services No. 1.

Answer 372

Does not apply.

Answer 373

All of the above.

Answer 374

Expert testimony in a matter.

Answer 375

Serving as a member of an arbitrator panel.

Answer 376

All of the above.

Answer 377

We are members of the AICPA.

Answer 378

Forensic accountants must consider the legal rules of procedure and evidence.

Answer 379

Providing an opinion on the presentation of a company's financial statements.

Answer 380

The U.S. Federal rules for taking suspects into custody.

Answer 381

Serve as a fact witness at trial.

Answer 382

A formal vote by the AICPA membership.

Answer 383

Independence.

Answer 384

Perform a conflict-of-interest check.

Answer 385

Revoke the member's CPA license.

Answer 386

Financial Planning Services.

Answer 387

Tangible Assets.

Answer 388

Forensic and Valuation Services Executive Committee.

Answer 389

Other Members.

Answer 390

Both (a) and (b).

Answer 391

Any of the above.

Answer 392

The practitioner is permitted to serve in all the above roles.

Answer 393

Is exempt from.

Answer 394

Provides a clear winner.

Answer 395

Litigation.

Answer 396

May lead to a binding agreement.

Answer 397

All of the above justify a court excluding evidence because its probative value is substantially outweighed by a danger

Answer 398

It must reliably apply training and expert opinion to the facts of the case.

Answer 399

Facts or data in the case that the expert has been made aware of or has personally observed.

Answer 400

Nearly a couple of dozen.

Answer 401

Authentication and identification.

Answer 402

Many states base their rules, at least in part, on the U.S. Federal Rules of Evidence.

Answer 403

All of the above are required.

Answer 404

Unrelated claims.

Answer 405

Parties and nonparties to the lawsuit.

Answer 406

All of the above are major types of discovery tools.

Answer 407

Their production does not require a discovery request.

Answer 408

Seizing of documents.

Answer 409

Sentencing.

Answer 410

An affidavit.

Answer 411

The arraignment.

Answer 412

The preliminary hearing.

Answer 413

At the arraignment.

Answer 414

Unnecessary.

Answer 415

At least 12.

Answer 416

The offense took place.

Answer 417

Prosecution.

Answer 418

The prosecution.

Answer 419

Cross-examination.

Answer 420

Jury instructions.

Answer 421

Immediately after a sentence is entered and after a motion for a new trial is made.

Answer 422

The examination of the creditor.

Answer 423

Chapter 11.

Answer 424

Chapter 7.

Answer 425

A trustee appointed by the U.S. Department of Justice.

Answer 426

Are referred to a U.S. Federal District Count for resolution.

Answer 427

Only the U.S. District Courts.

Answer 428

None of the above.

Answer 429

Directly to the U.S. Supreme Court.

Answer 430

Hosted by the U.S. Department of Justice.

Answer 431

Both terrorist and money laundering.

Answer 432

Bribery of foreign officials.

Answer 433

Both (a) and (b).

Answer 434

None of the above.

Answer 435

Self-reporting.

Answer 436

At the time of.

Answer 437

Published scientific discoveries.

Answer 438

The date on which the work is first created.

Answer 439

Either (a) or (b).

Answer 440

The Lanham Act.

Answer 441

May offer protection in a given geographic area.

Answer 442

All of the above are associated with identity theft.

Answer 443

All of the above are traditional areas of crime for the LCN.

Answer 444

Both (a) and (b).

Answer 445

The fair and accurate credit transaction act (FACTA).

Answer 446

Both (a) and (b) are correct.

Answer 447

Suspicious Activity Reports (SARs) for transactions that might be related to money laundering.

Answer 448

Through FinCEN's BSA Direct Internet portal.

Answer 449

Terrorist organizations.

Answer 450

The U.S. Federal Bureau of Investigation (FBI) to intervene even if evidence is only at a state level.

Answer 451

All of the above are correct.

Answer 452

All of these above.

Answer 453

Both compensatory damages and unjust gains.

Answer 454

The Fourth Amendment.

Answer 455

Generally enforceable in the courts.

Answer 456

The practitioner works with the parties to achieve an agreed-upon result.

Answer 457

The facts and opinions.

Answer 458

Experts must ascertain whether the information on which they intend to rely will be admissible for the purpose.

Answer 459

None of the above.

Answer 460

The US FCPA permits certain facilitation payments, although the definition is narrow.

Answer 461

If there are reasonable grounds to suspect money laundering, suspicious transaction reports must be made to Financial Transactions and Reports Analysis Centre (FINTRAC).

Answer 462

The attorney for the person or entity being represented.

Answer 463

None of the above.

Answer 464

Subject to discovery.

Answer 465

All of the above.

Answer 466

Not subject to discovery.

Answer 467

Serving as a bankruptcy trustee.

Answer 468

Audits of financial statements.

Answer 469

Statement on Standards for Forensic Services.

Answer 470

Rendering an opinion.

Answer 471

Guarentee of outcome.

Answer 472

Marketing maretials can be used in cross-examinations.

Answer 473

All of the above.

Answer 474

Dispute Resolution.

Answer 475

All of the above are forensic services.

Answer 476

The AICPA Code of Conduct requires adequate planning and supervision of all work perfofmed on forensic services engagements.

Answer 477

Client advocacy.

Answer 478

Engaging in substantive disclosures with a potential expert before retention, creating a potential conflict of interest that may prevent later retention by opponents.

Answer 479

Usually prohibited even if disclosed.

Answer 480

Establisging an understanding with the client.

Answer 481

Both the attorney and the client are Emilio's clients.

Answer 482

Either a conclusion of value or a calculated value.

Answer 483

Either as a single numerical value or a range of numerical values.

Answer 484

Theft, obstruction, or concealment.

Answer 485

Be inappropriate to conclude upon the suspect's guilt in the report.

Answer 486

May not be sufficient sources of information in identifying assets subject to bankruptchy proceedings.

Answer 487

Not a required element.

Answer 488

More likely

Answer 489

The SSFS No. 1 is effective for new engage,emts accepted on or after January 1, 2020, and early adoption is allowed.

Answer 490

All of the above are pillars of strong corporate governance.

Answer 491

She must communicate significant reservations regarding the engagement and update her understanding with the client regarding the scope of work.

Answer 492

Assessment

Answer 493

Admission-seeking questions.

Answer 494

Introductory.

Answer 495

Deception.

Answer 496

Might be asked concluding questions where appropriate, although some interviewers might skip the concluding questions when there is a signed confession.

Answer 497

Depositions.

Answer 498

None of the above.

Answer 499

May or may not be.

Answer 500

Motions in limine.

Answer 501

Determining guilt in computer crimes.

Answer 502

Should only detail those opinions and conclusions that are clearly consistent with the evidence gathered by the practitioner.

Answer 503

The practitioner.

Answer 504

Power it down.

Answer 505

May be permanently decrypted by using a commercial-grade forensic tool kit.

Answer 506

Removed from the computer and then cloned.

Answer 507

Not boot the cloned copy because booting it can cause changes to its data.

Answer 508

Inaccessible.

Answer 509

Likely recoverable shortly after their being deleted from the trash bin.

Answer 510

Many times.

Answer 511

E-mail message sent.

Answer 512

Is a possible way to trace the person's internet communications.

Answer 513

IP address.

Answer 514

Deposition.

Answer 515

Sample extractions.

Answer 516

Reprogramming computer devices.

Answer 517

Gain access to remote computers.

Answer 518

Is often referred to as a Ghost Acquisition.

Answer 519

Writing to the media.

Answer 520

Fixed hard drive.

Answer 521

Imaging ERP systems to maintain authenticity.

Answer 522

Unallocated Space.

Answer 523

Accessed date.

Answer 524

Economic espionage.

Answer 525

IP Tracing.

Answer 526

The dark web.

Answer 527

The dark web.

Answer 528

A consultant.

Answer 529

The expert witness.

Answer 530

The practitioner's direct control.

Answer 531

The admitted and admissible evidence in the matter, publicly available information and the evidence normally relied upon by this type of professional.

Answer 532

Conclusions and professional judgments.

Answer 533

Conclusions and professional judgments.

Answer 534

Adopt a formal policy for retaining records.

Answer 535

The practitioner is required by AICPA authoritative standards to

Answer 536

The professional may rely on all of the above.

Answer 537

Damage computations.

Answer 538

All of the above must be submitted with written reports from expert witnesses.

Answer 539

The witness has reliably applied the principles and methods to the facts of the case.

Answer 540

Frye case.

Answer 541

All of the above are standards provided by the U.S. Supreme Court.

Answer 542

Generally acceptable in the scientific community.

Answer 543

Rational perceptions.

Answer 544

Their personal knowledge.

Answer 545

Expertise, rather than his or her direct knowledge of facts or events.

Answer 546

Assist the trier of fact.

Answer 547

An opinion on the fair presentation of financial statements.

Answer 548

All of the above.

Answer 549

Nonauthoritative guidance for members.

Answer 550

Both litigation and investigative services.

Answer 551

All of the above are general types of litigation services.

Answer 552

An abridged version of a detailed report.

Answer 553

States that the extent of supporting documentation is left to the judgment of the analyst.

Answer 554

The analyst and the client agree on the valuation appraoches and methods the analyst will use.

Answer 555

May be either written or oral.

Answer 556

Does not include the effect of such events on the value.

Answer 557

Both a subpoena duces tecum and a subpoena ad testificante.

Answer 558

A subpoena duces tecum.

Answer 559

A clearly defined.

Answer 560

None of the above.

Answer 561

None of the above.

Answer 562

The contract ends.

Answer 563

The business operations return to normal.

Answer 564

Be discounted to present value.

Answer 565

The time of trial.

Answer 566

Either suspend the loss period or permanently terminate it.

Answer 567

Special damages.

Answer 568

All of the above are used to reduce individual damage awards.

Answer 569

The trial date.

Answer 570

Unimpaired earnings.

Answer 571

The date of the trial.

Answer 572

None of the above.

Answer 573

Should also consider possible lost income from sources other than earnings.

Answer 574

May, depending on the state,

Answer 575

No less than a reasonable royalty.

Answer 576

Actual damages.

Answer 577

A statutory amount provided by state law.

Answer 578

Misappropriation.

Answer 579

Are significantly different from.

Answer 580

A pretax basis.

Answer 581

The market value.

Answer 582

Unjust enrichment.

Answer 583

None of the above.

Answer 584

Totally discharged.

Answer 585

Any party of interest.

Answer 586

Attorneys.

Answer 587

A fraudulent conveyance.

Answer 588

Creditors holding standard unsecured claims.

Answer 589

Any party of interest.

Answer 590

Tax debt older than five years.

Answer 591

Improper revenue recognition.

Answer 592

By overcounting ending inventories.

Answer 593

The creation of fictitious assets.

Answer 594

Covering up poor income performance.

Answer 595

All of the above may produce red flags.

Answer 596

All of the above may trigger an SEC investigation.

Answer 597

None of the above.

Answer 598

Immediately when the SEC begins an enforcement action.

Answer 599

Enforcement.

Answer 600

Enterprise risk management strategy.

Answer 601

With the internal auditor alone.

Answer 602

The external auditor.

Answer 603

All levels of management and staff.

Answer 604

The internal auditor.

Answer 605

Fraud risk assessment.

Answer 606

The population of fraud risks.

Answer 607

Both (a) and (b).

Answer 608

Both (a) and (b) are options for management.

Answer 609

None of the above.

Answer 610

All of the above are standard areas or types of fraud preventive controls.

Answer 611

Both fraud and errors.

Answer 612

Patent holder to prove entitlement to lost profits.

Answer 613

None of the above.

Answer 614

None of the above.

Answer 615

Be reduced by.

Answer 616

Analytical method.

Answer 617

All of the above may be used.

Answer 618

Punitive damages up to treble damages.

Answer 619

Neither lost sales nor a reasonable royalty.

Answer 620

Statutory value.

Answer 621

All of the above are services normally provided in relation to divorces.

Answer 622

May include.

Answer 623

May determine.

Answer 624

The related asset.

Answer 625

Provide no standards.

Answer 626

Personal goodwill.

Answer 627

Benefits arising from a defined contribution plan.

Answer 628

Retirement assets.

Answer 629

Nongovernmental ERISA-qualified.

Answer 630

Nonqualified.

Answer 631

A qualified.

Answer 632

Rejected in some districts in favor of the intrinsic value model.

Answer 633

Quantifiable and are anticipated to occur in the immediate future.

Answer 634

Some states use cash flows; others use taxable income.

Answer 635

Published guidelines.

Answer 636

Both (b) and (c) are correct.

Answer 637

Never marital property.

Answer 638

As a fixed percentage of income.

Answer 639

None of the above.

Answer 640

A decree of what constitutes a legal separation under local laws.

Answer 641

More than one-half of the year.

Answer 642

One-half by each spouse.

Answer 643

The party who earned the income or owned the property from which the income was generated.

Answer 644

Predivorce versus post-divorce.

Answer 645

Follows the property awarded to each spouse.

Answer 646

The child is a student less than 25 years old as of December 31.

Answer 647

As gifts with carryover basis.

Answer 648

Combined with.

Answer 649

Permits selection of the spouse to be taxed.

Answer 650

An early withdrawal penalty.

Answer 651

Both (a) and (b).

Answer 652

Discounted future benefits.

Answer 653

All of the above are typically considered.

Answer 654

None of the above.

Answer 655

All of the above are considered relevant.

Answer 656

A royalty rate.

Answer 657

The remaining useful life of the guideline intangible assets.

Answer 658

Cannot act as stand-alone valuation methods.

Answer 659

Valuation adjustments.

Answer 660

Excluded from.

Answer 661

A conclusion of value.

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