Deck 1: Introduction to Forensic Accounting and Fraud Examination

Question 1

Which of the following types of organizations typically use Forensic Accountants?

A) Publicly held corporations.
B) Private/non-profit corporations.
C) Federal/State Agencies.
D) All of the above.

Answer 1

D

Question 2

What is one of the primary differences between a Financial Statement auditor and a Forensic Accountant?

A) Financial statement auditors are likely to follow leads suggested by immaterial items whereas Forensic Accountants often must restrict their efforts to searching for material misstatements.
B) Forensic Accountants are likely to follow leads suggested by immaterial items whereas financial statement auditors often must restrict their efforts to searching for material misstatements.
C) Forensic Accountants must focus on specific legal areas that produce fraud charges under the courts of law whereas financial statement auditors focus their attention on the Generally Accepted Accounting Principles.
D) Forensic Accountants are likely to ask individuals to fix discrepancies found in financial statements whereas financial statement auditors will fail a corporations financial statement certification, therefore having repercussions with the SEC.

Answer 2

B

Question 3

Who was the founder of the Association of Certified fraud Examiners?

A) The 187th Congress of the United States.
B) President Bill Clinton.
C) Joseph Wells.
D) All of the above worked together to form the ACFE.

Answer 3

C

Question 4

If you are a litigation consultants and want to become credentialed by the National Association of Certified Valuation Analysts (NACVA), which credential would you be issued?

A) Certified Valuation Analyst.
B) Accredited Valuation Analyst.
C) Certified Forensic Financial Analyst.
D) National Valuation Analyst.

Question 5

Which is one of the areas that the Sarbanes-Oxley Act of 2002 has made CEO's rely on forensic accountants heavily?

A)CEO's must now certify their financial statements.
B) CFO's must become qualified as forensic accountants.
C) To become a CEO in a public company, their personal financial records must be certified by a forensic accountant.
D) Both a and

Question 6

Which of the following is not a skill needed by a Forensic Accountant?

A) Auditing Skills.
B) Criminology.
C) Sociology.
D) Information Technology.

Question 7

If you are a CPA and want to become credentialed by the National Association of Certified Valuation Analysts (NACVA), which credential would you be issued?

A) Certified Valuation Analyst.
B) Accredited Valuation Analyst.
C) Certified Forensic Financial Analyst.
D) National Valuation Analyst.

Question 8

Forensic accounting can be broken into how many categories?

A) Two: Investigative and Litigation.
B) Two: Internal and External.
C) Three: Investigative, External, Preventative.
D) Three: Internal, Litigation, Certified.

Question 9

What is a way to become a CFS?

A) Complete a multi-part examination that covers the detection, deterrence, investigation, and prosecution of white-collar crime.
B) Complete the ACFS Academy core courses and take an examination at the end of each course.
C) Be grandfathered in by means of submitting information on the experience and education of the candidate.
D) All of the above are ways to become a CFS.

Question 10

Forensic Accounting is defined as:

A) The practice of applying defined financial ratios to investigate a company's financial health.
B) The use of law enforcement to subpoena financial records to determine unlawful actions.
C) The application of investigative and analytical skills for the purpose of resolving financial issues in a manner that meets standards required by courts of law.
D) The investigatory arm of the Securities and Exchange Commission.

Question 11

If your actions are the result of misleading, intentional actions or inaction (including misleading statements and the omission of relevant information) to gain an advantage, then you have committed:

A) Perjury.
B) Contempt.
C) Treason.
D) Fraud.

Question 12

Which of the following events have made the Forensic Accounting industry more popular recently?

A) Corporate Scandals.
B) Sarbanes-Oxley Act of 2002.
C) Crime Dramas on Television.
D) Both a and

Question 13

What is the most recognized fraud credential?

A) Certified Fraud Examiner (CFE).
B) Certified Public Accountant (CPA).
C) American Counsel of Accredited Business Accountants (ACABA).
D) Enrolled Agent (EA).

Question 14

Which of the following is NOT a way to become a Certified Fraud Specialist (CFS)?

A) Successfully completing a multipart examination that covers the detection, deterrence, investigation, and prosecution of white-collar crime.
B) A bachelor's degree in business or ten years of accounting-related experience and pass the two parts of the Certified Fraud Specialist examination.
C) Completing the ACFS Academy core courses and taking an examination at the end of each course.
D) Being grandfathered in by means of submitting information on the experience and education.

Question 15

If you are experienced in the valuation field and want to become credentialed by the National Association of Certified Valuation Analysts (NACVA), which credential would you be issued?

A) Certified Valuation Analyst.
B) Accredited Valuation Analyst.
C) Certified Forensic Financial Analyst.
D) National Valuation Analyst.

Question 16

What types of organizations offer credentials to forensic accountants?

A) Association of Certified Fraud Examiners.
B) American College of Forensic Examiners.
C) Institute of Business Appraisers.
D) All of the above.

Question 17

Which of the following two are types of auditors?

A) External and Internal
B) Internal and Forensic
C) Forensic and International
D) External and Forensic

Question 18

Which of the following does a forensic accountant investigate?

A) Purchases of Businesses.
B) Valuation of divorce assets.
C) Calculation of lost profits.
D) All of the above.

Question 19

What is the mission of the Association of Certified Fraud Specialists (ACFS)?

A) To encourage CPAs to report potential areas that a Forensic Accountant should be used within.
B) To pre-screen potential Forensic Accountants who would make good FBI agents.
C) To encourage its members to offer pro-bono service to the communities in which its members reside.
D) All of the above are part of the ACFS's mission.

Question 20

According to the 2002 Report to the Nation on Occupational Fraud and Abuse, what percentage of corporate revenues were lost in that year to fraud?

A) 2%.
B) 4%.
C) 5%.
D) 8%.

Question 21

Governmental agencies never use forensic accountants.

Question 22

Due to the Sarbanes-Oxley Act of 2002, CEO's no longer have to sign their financial statements.

Question 23

What credential does the AICPA offer?

A) Accredited in Business Valuation.
B) Accredited Business Accountant.
C) Forensic Accountant Accreditation.
D) Accounting for Forensic and Litigation.

Question 24

The Institute of Business Appraisers (IBA) supports the valuating of which type of businesses?

A) Public Corporations.
B) Private Corporations.
C) Closely-held Businesses.
D) Non-Profit Organizations.

Question 25

Misrepresentation is the act of presenting oneself in a manner that does not agree with reality. What does "presenting" mean?

A) Actions, statements, or omissions.
B) Words, court judgments or opinions.
C) Appearance, style or function.
D) Both a and

Question 26

What are litigation services?

A) It is another term for a law firm.
B) It is a specialized branch of forensic accounting.
C) It is the service provided to the courts to determine an equitable judgment.
D) It is an out of court settlement service for corporations.

Question 27

Forensic Accounting is a part of Fraud investigation.

Question 28

Investigative services that may or may not lead to courtroom testimony.

Question 29

Internal Auditors are individuals from outside CPA firms that come into your business to perform an audit.

Question 30

You are attempting to get two parties to compromise on a situation. This means that you are engaged in:

A) Litigation.
B) Mediation.
C) Plea Bargaining.
D) Grand Jury testimony.

Question 31

In which way does the AICPA support Forensic Accountants?

A) Through its Forensic Accountants division.
B) Through its Business Valuation and Forensic & Litigation Services section.
C) Through its credentialing of Forensic Accountants.
D) The AICPA does not support Forensic Accountants.

Question 32

It is possible to hold credentials as a forensic accountant.

Question 33

What is Defalcation?

A) The ruling of a judge to restore the assets wrongfully taken to their rightful owner.
B) The act of conspiring to commit perjury.
C) The process of finding stolen assets through financial statement analysis.
D) The appropriation of assets for the benefit of those who do not rightfully deserve them.

Question 34

The National Litigation Support Services Association (NLSSA) allows only one CPA firm into its membership:

A) In each Metropolitan Statistical Area.
B) In each Megalopolis.
C) Per million residents in the city it resides.
D) Each four year presidential cycle.

Question 35

Errors are always an indication of intentional fraud.

Question 36

The Institute of Business Appraisers offers which certification?

A) CPa.
B) CBA.
C) AICPA.
D) EA.

Question 37

Some forensic accountants perform investigations much like financial private investigators.

Question 38

Forensic Accounting does not greatly differ from traditional accounting.

Question 39

How does forensic accounting differs from other types of accounting?

A) It is a separate field that has no relation to accounting.
B) Forensic Accountants require at least an masters in accounting.
C) Forensic Accountants are more likely to be found dissecting these statements and obtaining evidence from other sources.
D) General Accountants must hold to subjective evidence whereas forensic accountants must use objective evidence.

Question 40

To date, there are only two forensic accounting organizations in the world.

Question 41

What are some of the areas a forensic accountant should be knowledgeable in?

Question 42

What are some of the special skills that a forensic accountant might use in their trade?

Question 43

Describe how a forensic accountant would employ his or her skills?

Question 44

Even if a case does not go to court, a forensic accountant might be called upon to assist during what two types of situations (define both)?

Question 45

How is defalcation different from misrepresentation?

Question 46

What does credentialing mean?

Question 47

In what sectors of our economy can forensic accountants find work?

Question 48

What was one of the biggest changes in the SOX of 2002 that increased the usage of forensic accountants?

Question 49

Compare and contrast the usage of internal versus external auditors.

Question 50

Name some of the organizations that support forensic accounting: