Deck 8: Transforming Data Into Evidence

Question 1

Which of the following terms is used to describe data in which specific items or time periods have been omitted?

A) missing data
B) altered data
C) nonexistent data
D) hidden data

Answer 1

A

Question 2

Unlike the choice of methodology,the choice of technique is driven primarily by the nature of the problem.

Answer 2

False

Question 3

Which of the following is true of first-party data?

A) These are obtained from published and unpublished reference sources.
B) These are obtained from are obtained from entities that maintain records regarding the subject.
C) These are obtained from individuals or entities that are related or connected to the subject.
D) These are obtained from an individual or an entity.

Answer 3

D

Question 4

In the context of a forensic accounting engagement,which of the following is an instrument that creates leverage in processing,understanding,and/or illustrating data?

A) tool
B) technique
C) method
D) process

Question 5

Forensic accountants often do not have access to the entire universe of relevant data.

Question 6

In civil cases,the availability of data depends on the engaging party.

Question 7

Rule 702 of Federal Rules of Evidence requires that

A) the CPAs use complex technological analysis tools for gathering data.
B) any qualitative data presented is supported by quantitative data.
C) only direct evidence is used in a case.
D) the expert testimony is the product of reliable principles and methods.

Question 8

Which of the following statements best defines the term data analysis?

A) It is the process of eliciting information.
B) It is the act of conducting a systematic enquiry or appraisal.
C) It is the separation of a whole into its component parts.
D) It is the process of consolidating data.

Question 9

Diana,a forensic accountant,obtained the financial statements of Ryer Inc.from its accountant.She noted that Ryer generated a profit of $152.7 million in the previous year.This is an example of

A) third-party data.
B) quantitative data.
C) fourth-party data.
D) qualitative data.

Question 10

Which of the following is an example of qualitative data?

A) increase in profit margin over a five-year period
B) average weight of employees of the organization
C) preferred color of most employees in the organization
D) number of units produced on a daily basis

Question 11

Which of the following is an example of nonexistent data?

A) The check slips for the month of June and July were misplaced. The bank maintains a copy of this at the client's request.
B) Some entries were changed to reflect a higher value of assets. The invoices containing the original amount are yet to be altered.
C) The client refused to divulge the details of the sale contract. The supplier does not have a copy of the contract.
D) The company maintains documents supporting transactions only for three years. The transaction in question was made five years ago.

Question 12

Since time is an objective measure,all measurements of time are reliable.

Question 13

Use of bank statements to confirm components of financial statements and tax returns is an example of third-party data.

Question 14

A failure in the preparation of data may render the results of a test inaccurate.

Question 15

The end transcript of an interview is more important than the process of transcribing an interview.

Question 16

Descriptive statistics and digital analysis are examples of

A) tools of analysis.
B) methods of analysis.
C) techniques of analysis.
D) systems of analysis.

Question 17

Which of the following is a key consideration when evaluating sufficiency of data?

A) purpose of data
B) application of data
C) relevance of data
D) availability of data

Question 18

In the context of a forensic accounting engagement,the terms method,tool,and technique can be used interchangeably.

Question 19

Relationship charts,which illustrate relationships and flows,are a form of link analysis.

Question 20

A subpoena duces tecum is a legal notice directing the attendance of a person at a deposition or trial.

Question 21

Which of the following is a benefit of a written data analysis plan?

A) It points out weaknesses in the data and assists the rectification of such weaknesses.
B) It lists the tools, methods, and techniques to be used during data analysis.
C) It forces the analyst to explicitly consider constraints.
D) It helps the analyst to identify data that is relevant and important.

Question 22

An organized collection of data that has been created for a specific purpose is called a

A) data request.
B) data dump.
C) database.
D) memo.

Question 23

Which of the following is an advantage of data analysis tools?

A) They deal with quantitative data and hence have specific applicability.
B) They force the analyst to explicitly consider constraints in the data.
C) They allow the forensic accountant to extract the meaning of the data in a usable manner.
D) They are easy to apply, easy to customize, and easy to understand.

Question 24

Which of the following statements is true with respect to reliability of data sources?

A) First-party data have the highest reliability.
B) Second-party data may have a higher level of reliability than first-party data.
C) Third-party data are not very reliable as they can be influenced by the subject.
D) Fourth-party data are vulnerable to manipulations by subject.

Question 25

Which of the following is a typical example of document dumping in litigation?

A) Big Farm, Corp. reported that it has shredded all the original invoices provided by a particular vendor.
B) Nyntal, Inc. kept all its old receipts, copies of contracts and agreements, bank slips and all other documents, created right from the inception of the company, in a separate warehouse.
C) Sara requested Wilmerry, Inc. to produce four bank slips relating to the transactions under scrutiny. Wilmerry gave her all the bank slips of last two years.
D) Quinn agreed with Kensington, Corp. to destroy the findings of the engagement and drown the documents collected during the investigation for a monetary benefit.

Question 26

Which of the following is a similarity between third-party data sources and fourth-party data sources?

A) Both data sources may have some firsthand knowledge of the subject's activities.
B) The information collected from both data sources does not reflect the actual activity of the subject.
C) Data received from both data sources fall under the category of secondary research.
D) Both data sources may involve associated costs.

Question 27

Which of the following is an advantage of third-party data source?

A) It can be obtained independently by the forensic accountant, without the assistance of the subject or engaging counsel.
B) It is outside the subject's ability to manipulate.
C) It is direct and accessible.
D) It can give an insight on the environment in which the subject operates.

Question 28

Which of the following statements best describes the term subpoena?

A) It is a court order issued by a judge authorizing a law enforcement agency to perform a search of a person or location and confiscate any evidence that is found.
B) It is a document that directs the production of documents or other items.
C) It is the tracing of the incremental effects of some initial stimulus.
D) It is a legal notice directing the attendance of a person at a deposition or trial.

Question 29

Which of the following is true of the universe of data?

A) Maintaining the proper boundaries of the data universe is an ongoing effort throughout the investigation.
B) After selecting a sample from the universe of data, conclusions are arrived at by using deductive reasoning.
C) In most cases, forensic accountants have access to the entire universe of relevant data.
D) It is often defined toward the end of the investigation.

Question 30

Which of the following is issued by a judge when data is to be obtained by law enforcement in a criminal case?

A) order
B) subpoena
C) search warrant
D) writ

Question 31

Which of the following is a difference between second-party data and third-party data?

A) Second-party data are obtained from individuals or entities that are related to the subject, whereas third-party data are obtained from entities that maintain records regarding the subject.
B) The advantage of second-party data is that it can be obtained independently by the forensic accountant, whereas the advantage of third-party data is that it is outside the subject's ability to manipulate.
C) Second-party data falls under the realm of primary research, whereas third-party data falls under the realm of secondary research.
D) Second-party data might require more time to obtain, whereas third-party data are readily available to the forensic accountant.

Question 32

As a part of a forensic accountant engagement,you interviewed all the first cousins of the subject.Which of the following types of data did you obtain?

A) first-party data
B) second-party data
C) third-party data
D) fourth-party data

Question 33

Which of the following is a purpose of document dumping?

A) to get rid of unnecessary and outdated documents and retain only those documents that are relevant
B) to conceal relevant and vital information from being tracked by the forensic accountants
C) to destroy material documents that contain important data
D) to make the document of interest more difficult to identify

Question 34

________ describes the tracing of the incremental effects of some initial stimulus.

A) Subpoena
B) Ripple theory
C) Butterfly effect
D) Wind theory

Question 35

Data requests should be specific because

A) vagueness is a basis for objection by the opposing party.
B) it requires lesser initial efforts.
C) with lesser specificity, there is a greater risk of accidental exclusions.
D) it eliminates the requirement of any supporting documents.

Question 36

If the opposing party fails to comply with discovery requests or does not have access to the data,it may be necessary for the attorney to issue a

A) writ.
B) subpoena.
C) order.
D) search warrant.

Question 37

Which of the following is a drawback of link analysis?

A) It fails to reveal unapparent relationships.
B) It cannot be used in cases where the subject is unknown.
C) Compared to other investigative techniques, it can be time-consuming.
D) Too many links may affect the quality of the information.

Question 38

Which of the following is a difference between fourth-party data sources and other data sources?

A) Fourth-party data sources do not reflect the actual activity of the subject, whereas the other data sources reflect the actual activity.
B) Fourth-party data sources are obtained from reference sources, whereas the other data sources are obtained from entities that maintain records regarding the subject.
C) The other data sources fall within the realm of secondary research, whereas fourth-party data sources fall within the realm of primary research.
D) The other data sources may have some firsthand knowledge of the subject's activities, whereas fourth-party data sources can only be used to confirm data obtained from other sources.

Question 39

Which of the following is the first step of data preparation?

A) standardization of data
B) creating a data inventory
C) classification of data
D) creating a database

Question 40

Which of the following is a difference between relationship charts and timelines?

A) Relationship charts illustrate flows of information or funds, whereas timelines provide visual aid to highlight missing information.
B) Relationship charts illustrate a sequence of events, whereas timelines reveal unapparent relationships.
C) Relationship charts suggest causal relationships, whereas timelines identify parties of interest.
D) Relationship charts identify commonalities among objects and trace from cause to effect, whereas timelines comprise of shapes that represent individual objects and lines that connect them.

Question 41

Which of the following is true of the process of transcribing an interview?

A) The focus is on the transcript itself and not on the process.
B) Interview transcription involves data analysis and interpretation.
C) The forensic accountant does not play a very active role in the transcription process.
D) The interview should be transcribed by the person who conducted the interview.

Question 42

Which of the following is true of timelines?

A) Timelines fail to highlight missing information in the sequence.
B) Timelines are prepared to reveal hidden relationships.
C) Timelines are more time-consuming than other data analysis tools.
D) Timelines are the most effective means of communicating a story.

Question 43

Which of the following describes the process of coding with regard to qualitative research?

A) transcribing the interview in order and then rearranging into categories based on themes
B) transcribing the interview in order and then coding the transcript so that the information cannot be used by others
C) transcribing the interview in order and then extracting meaning from the data
D) transcribing the interview in order and then determining the information to be included

Question 44

Why is it important to define the universe of data?

Question 45

Time is an objective measure,hence timeline data are always highly reliable.Examine the validity of this statement.

Question 46

Which of the following is true with regard to identifying themes while transcribing interviews?

A) For less-structured interviews, themes could be based on experiences, behaviors, views, or any other factor that becomes apparent.
B) Interview questions are a good starting point for identifying themes if the interview was semi-structured in nature.
C) In a fact-finding interview, themes may simply emerge from the flow of conversation.
D) The themes identified for the structure of the transcript may not always be in consistence with the objectives of the engagement.

Question 47

Which of the following best describes reduction as a key form of influence while transcribing an interview?

A) deciding how to reduce the information obtained in an interview in order to include only relevant information
B) defining what information is relevant and what information is to be left out
C) determining how the information obtained in an interview is reduced to words
D) describing what should be the word count and language to be used in the transcript

Question 48

Explain why an interview should be transcribed by the person who conducted the interview.

Question 49

What functions does a data inventory serve?

Question 50

What are the benefits of a written data analysis plan?