Forensic Final

Question 1

What is called when determining what an asset will sell for within a reasonable time within an open market with a willing buyer, with a normal means of consideration, and with a seller who are both fully informed and motivated?

Answer 1

Fair market value

Question 2

The fundamental value of an asset can be determined by what?

Answer 2

Intrinsic value

Question 3

What is the most likely illegal scheme to evade real estate taxes?

Answer 3

Ad valorem

Question 4

Ad valorem taxes may apply to which of the following?

Answer 4

Real and personal property tax

Question 5

Which of the following is NOT addressed by the United Nations Convention against Transnational Organized Crime?

A. Corruption
B. Obstruction of justice
C. Domestic tax policy
D. Illegal transport of individuals
E. Exploitation
F. Human slavery

Answer 5

Domestic tax policy

Question 6

Which of the following was NOT an activity the La Cosa Nostra crime group was involved in?

A. Environmental regulation
B. Labor racketeering
B. Drug trafficking
C. Murder
D. Gambling
E. Bootlegging
F. Stock manipulation
G. Fraud

Answer 6

Environmental regulation

Question 7

What is the goal of labor racketeering?

Answer 7

Domination and control of labor unions to access funds and exert influence

Question 8

What is the average annual percentage rate for loan shark loans?

Answer 8

300% (“vig”)

Question 8

Who accepts bets for the numbers game?

Answer 8

Bookies

Question 9

What nationality are all made men?

Answer 9

Italian (100% Italian on father’s side)

Question 10

How does one become an associate in an organized crime family?

Answer 10

Introduced as a “friend,” must prove loyalty, capabilities, and earning potential

Question 11

What is one criterion for becoming a made man?

Answer 11

Carry out a hit

Question 12

How did the FBI catch two of Russia’s best computer hackers?

Answer 12

Offered fake U.S. job interviews

Question 13

Which organization is the Financial Crimes Enforcement Network under?

Answer 13

U.S. Department of the Treasury

Question 14

Under the Bank Secrecy Act, when must financial institutions report transactions?

Answer 14

Over $10,000 or suspicious activity

Question 15

Where do some terrorist organizations base their operations?

Answer 15

Western European countries (also includes houses of worship)

Question 16

Which of the following is NOT a component of a terrorist cell?

A. Spiritual leader
B. Logistics support
C. Real estate broker
D. Weapons expert
E. Financial support

Answer 16

Real estate broker

Question 17

According to the DOJ, what percentage of bankruptcy cases involve fraud?

Answer 17

10%

Question 18

What is the most common type of bankruptcy fraud?

Answer 18

Concealment of assets

Question 19

(Blank) involves a neutral third party who helps resolve disputes through structured negotiation and may issue findings.

Answer 19

Arbitration

Question 20

Which of the following is NOT one of the three elements of the classic legal definition of fraud?

A. Misrepresentation
B. Reliance
C. Intent to testify
D. Injury

Answer 20

Intent to testify

Question 21

What is the most common type of financial statement fraud?

Answer 21

Overstating revenues

Question 22

Which of the following is NOT one of the motives listed for committing financial statement fraud?

A. Theft
B. Bribery
C. Other illegal activities
D. Tax compliance

Answer 22

D. Tax compliance

Question 23

What is the most important element in detecting fraud?

Answer 23

Audit trail

Question 24

Basic sales skimming, check tampering, and fraudulent credit approvals are part of what type of fraud?

Answer 24

Revenue cycle fraud

Question 25

When physical evidence can be specifically linked to a particular object or person, what is achieved?

Answer 25

Forensic identification

Question 26

What is biometrics?

Answer 26

Science of identifying persons by physical characteristics

Question 27

What is the most common way in which fraud is discovered?

Answer 27

Tips and hotlines

Question 28

Which of the following is are the types of enterprise risk management control?

Answer 28

Preventive, Detective, Corrective

Question 29

What is the correct order for conducting interviews?

Answer 29

Start with those least likely involved; suspect is interviewed last

Question 30

Which of the following is NOT a rule forensic accountants should follow when working with original/perishable documents? A. Obtain originals B. Maximize document handling C. Secure access D. Minimal handling E. Maintain chain of custody

Answer 30

Maximize document handling

Question 31

Name the four types of documentary evidence.

Answer 31

Invoices, bank statements, memos, contracts

Question 32

When a forensic accountant traces financial statements back to source ledgers, what is this called?

Answer 32

Vouching

Question 33

What does the Locard Exchange Principle say?

Answer 33

Every contact leaves a trace

Question 34

What is NOT one of four main types of evidence? A. Physical B. Documentary C. Testimonial D. Predictive E. Demonstrative

Answer 34

Physical, Documentary, Testimonial, Demonstrative

Question 35

(Blank) are crime scene technicians who specialize in collecting evidence.

Answer 35

Criminalists

Question 36

Burglary, embezzlement, larceny, and fraud are what types of crimes?

Answer 36

Common-law crimes

Question 37

Which of the following is NOT one of the standard audit assertions? A. Managerial intent B. Presentation and disclosure C. Rights and obligations D. Existence and occurrence E. Completeness F. Valuation and allocation

Answer 37

Managerial intent

Question 38

Crimes covered under SOX have penalties of 5–20 years. What crimes are these?

Answer 38

White-collar crimes

Question 39

What does a forensic accountant investigate?

Answer 39

Fraud, lost profits, business interruption, asset valuation, financial trails

Question 40

An error or omission is considered material if what?

Answer 40

It could influence the judgment of a reasonable user

Question 41

Which types of organizations use forensic accountants?

Answer 41

Law firms, courts, government agencies, corporations, insurance companies, IT, etc.

Question 42

How does the auditor communicate her conclusion?

Answer 42

Audit report

Question 43

What is one of the most dangerous implications of SOX?

Answer 43

Corporate officers held criminally liable for subordinate actions

Question 44

What two categories does the AICPA use to classify forensic accounting?

Answer 44

Litigation and Investigative services