1. With data mining, observations are selected randomly.
a. True
b. False

2. Computer applications allow an analyst to screen all observations in a data set rather than rely on statistical sampling.
a. True
b. False

3. A forensic accountant uses data mining to:
a. Select a perfect random sample
b. Avoid making Type IV errors
c. Avoid Type V errors
d. Reduce a large number of items to a smaller number that can be examined more closely

4. Data mining often involves the comparison of new data against data profiles for the purpose of identifying:
a. Systematic items
b. Symmetric items
c. Deviant items
d. Regular items

5. Data mining is useful in each of the following applications except:
a. Investment analysis
b. Credit scoring
c. Fraud detection
d. All of the above are applications of data mining

6. Data mining can identify all types of fraud.
a. True
b. False

7. Which of the following is a form of data mining?
a. Sorting
b. Accumulating
c. Storing
d. Synthesizing

8. Ratio analysis is a form of data mining.
a. True
b. False

9. Which of the following is not a commonly used data mining ratio?
a. Ratio of the largest value to the smallest value
b. Ratio of the largest value to the second- largest value
c. Ratio of the smallest value to the second- smallest value
d. The times interest earned ratio

10. A Type I error occurs when:
a. An analysis fails to identify a true signal b. An item is selected for further analysis when it should not be selected
c. An analyst fails to identify the first item that is incorrect in a data set
d. An analyst fails to identify the last item that is incorrect in a data set