Mediation and arbitration are conducted where and how are they disclosed? In a U.S. District Court and do not enter into the public record. In private and do not enter into the public record. In a State Supreme Court and are entered into the public record. In private and enter into the public record if there is an admission of guilt by the fraudster. 2) The scope of the investigation serves to: (2pts) Place limits on the objectives of the investigation. Expand on the investigation if other fraud is found. Place limits on the breadth of the investigation. Contract the focus of the investigation. None of the above 3) The fraud theory investigation process involves: (2pts) Quarterly gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud. Annually gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud. Periodically gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud. Systematically gathering and reviewing evidence for the purpose of documenting the presence or absence of fraud. 4) Which of the following is a step in the fraud-theory approach? (2pts) Prove the hypotheses invalid. Refine and amend the hypotheses. Link the hypotheses to a GAAP. None of the above are a step in the fraud-theory approach. 5) What are the four types of evidence collected in the evidence collection process?(2pts) Physical evidence, financial statement evidence, observational evidence, and interview evidence. Physical evidence, documentary evidence, tip hotline evidence, and interview evidence. Physical evidence, documentary evidence, observational evidence, and witness evidence. Physical evidence, documentary evidence, observational evidence, and interview evidence. 6) How many steps does the fraud engagement process involve? (2pts) 6 8 10 6 to 12, depending upon law enforcement involvement 7) During the fraud investigation process, it is important to remember: (2pts) To never exceed the amount of billable hours authorized under GAAP. The fraud investigator is not law enforcement and cannot provide evidence in a trial. The rights of the victim as well as the accused. To limit the investigation to the U.S. Code that has been violated. None of the above 8) The incident report contains: (2pts) All evidence that will need to be turned over to the defense during discovery. Detailed working papers to prove the fraud. The initial information used to justify the investigation. A bench warrant for the accused. 9) Almost all ongoing fraud schemes, no matter how sophisticated, have one weakness in common:(2pts) The perpetrator is subject to being caught in the act. The fraud can be detected through financial statement analysis. The burden of proof is on the fraudster. Law enforcement can arrest the fraudster at anytime. 10) If you are testing a piece of evidence to determine if it is consistent with the fraud case, you are performing a(n):(2pts) Hypothesis test Investigation test Litmus test Hersey test 11) The evidence collection process begins with: (2pts) Routine observations of accounting processes. Interviews with those furthest away from the fraud. A review of the physical and document evidence. Wherever the investigator feels is most important. 12) Fraud theory is: (2pts) Fraudster, circumstances, motive and opportunity The details surrounding crime and punishment Where, why, with whom, opportunity and fraud Who, what, when, where, why, how All of the above 13) When declaring guilt or innocence, the Certified Fraud Examiner Code of Ethics states: (2pts) A fraud examiner must conclusively prove guilt or innocence in all cases of alleged fraud. No opinion shall be expressed regarding the guilt or innocence of any person or party. Guilt or innocence will be determined in conjunction with the wishes of the corporation investigating the fraud. The Certified Fraud Examiner Code of Ethics are intentionally silent on this topic. 14) Document Evidence may include: (2pts) Working papers Computer files Charts and graphs All of the above None of the above 15) In which order are interview typically conducted? (2pts) From the suspect out toward those remotely familiar with the suspect. From farthest away from the suspect back towards the suspect. As personnel become available. Alphabetically by last name. 16) The objective of the physical and document review phase is: (2pts) To build an appropriately sized case file. To become as familiar as possible with the relevant business processes and individuals involved. To assist in preparation of the engagement letter. All of the above None of the above 17) The basis for net worth calculation is: (2pts) Net Worth= Gross Pay Tax Liabilities Current Debt Cash on hand Assets= Liabilities Owners Equity Assets = Liabilities + Owners Equity None of the above 18) When can a search warrant be executed? (2pts) Between 6 a.m. and 10 p.m. Anytime. Only when the occupants are not home. Only when the suspect is present. None of the above 19) If skimming has been in practice for years in a business, why might it be hard to detect using horizontal analysis? (2pts) Comparing a year in which receipts have been skimmed to other years in which. receipts have been skimmed will usually not reveal differences. Horizontal analysis is typically performed in industries that have high skimming rates. Gross margins for the industry typically won't reveal any fraud when evaluated via Horizontal analysis. Skimming typically is revealed on the income statement and horizontal analysis is only done on balance sheet accounts. 20) If evidence is tangible, it is said to be __________ evidence. (2pts) Documented Hersey Physical Forged 21) Two common approaches to using ratio analysis are: (2pts) Internal and external. Horizontal and vertical. Formal and informal. Industry and general. None of the above 22) Once financial statement fraud is suspected, how should the fraud investigator proceed? (2pts) Call the district attorney to begin criminal proceedings. Determine whether the financial statements agree with the general ledger balances. Perform a Benford's Law test. Interview the accounting department staff. 23) Which of the following type of records can typically only be accessed by law enforcement? (2pts) Commercial Databases Motor Vehicle Identificaiton Number Dealership vehicle records UCC Filings All of the above 24) Where are the most restricted databases maintained in each state? (2pts) At the public safety headquarters. At the secretary of state's office. At the state information management computer backup location. Within the department of vital statistics office. 25) How does a suspect become "read" during the interview process? (2pts) Through verbal clues. Through non-verbal clues. Through building a rapport with the suspect. All of the above 26) Typically, the primary difference between interviewing and interrogating a suspect is: (2pts) Miranda rights are read prior to interrogating. Miranda rights are read prior to interviewing. Interviewing always occurs with a lawyer present. Interrogating always takes place at a police station. None of the above 27) The signed confession should be a(n) _____________ regarding the guilt of the perpetrator. (2pts) Concise statement Detailed account of the amount of fraud that has occurred. Full statement recalling every time the fraud incurred. Sleuths response answering all the questions of who, what, when, where, why and how. 28) Why would a suspect be interviewed in a neutral environment? (2pts) To move them closer to a police station. To assist them with memory recall. To purposefully place him in a setting that isnt familiar to him. All of the above None of the above 29) When should the interview be recorded? (2pts) Always Never Only if note taking will not be detailed enough. With a court order. 30) In seeking a confession, the interviewer can make confessing easier for the suspect by helping him find a ____________ acceptable reason for committing the fraud. (2pts) Morally Mentally Justifiably Financially All of the above 31) Which of the following is a qualifier? (2pts) Every Never Almost All of the above 32) _____________ are asked to determine whether the interviewer is a suspect and are only asked when the interviewer believes that the interviewee is a suspect. (2pts) Leading questions Assessment questions Statements of fact Accusing questions All of the above 33) Both verbal and non-verbal responses to questions can be: (2pts) Indications of guilt Admissions of guilt Used to convict for fraud Left up to interpetation by forensic psychologists. 34) Which of the following systems deals specifically with fingerprints? (2pts) NDIS IAFIS CODIS NIBIN All of the above None of the above 35) What is the wipe standard for the Department of Defense? (2pts) It states that media must be written over 7 times before it is considered erased. It states that only a 7X power magnet can wipe out a hard drives contents. A surface wipe with an ionic scope must be conducted prior to opening and removing any components. The process of gathering the data stored in a computer's RAM. 36) If a computer that needs to be investigated is currently turned off, what should be done? (2pts) It should be turned on and investigative work should begin immediately. It should be dismantled and the hard drive should be installed in a separate machine. It should not be turned back on. The main user of the computer should be made to turn it back on. 37) Which of the following tests set specific requirements for a technique or theory to be called scientific? (2pts) Litness. Crendential. Frye. Daubert. 38) Testimony by scientific experts is governed by which rule? (2pts) Rule 702 FASB Statement 702 SEC Section 702 SOX Section 702 Rule 70 39) DNA comparisons are generally considered: (2pts) 100% reliable. Not as reliable as fingerprints. Only as reliable as the crime lab that processes them. Reliable, but still subject to error. 40) What is the Locard Exchange Principle? (2pts) It takes at least two people to commit a crime. Every contact leaves a trace. Forensic scientists must share data to solve a crime. Some evidence will be lost when transferring it from the scene to the lab. All of the above 41) Why must criminalists and forensic accountants work together at some crime scenes? (2pts) FASB has published a statement regarding their working together. Sometimes a criminal may arson a building to cover up a financial crime. Insurance companies require a financial audit if arson is expected. Only criminalists are allowed into a crime scene and must gather evidence for the forensic accountant. 42) If someone is applying science to legal matters, they are practicing: (2pts) Forensic Accounting. Forensic Science. Forensic Law. Forensic Engineering. 43) The problem with the investigator making statements before an investigation is complete stems from the principle of: (2pts) Reverse Proof. Benford's Law. Ratio of Analysis of Financial Statements. Double Jeopardy. 44) Which of the following is a key word to imply fraud, but not actually accuse someone of it? (2pts) Apparent Consistent Accused Guilty All of the above 45) What are the two primary roles a forensic accountants play in forensic matters? (2pts) Valuator and estimator. Mediator and artbitrator. Expert consultants and expert witnesses. Rented judge and rented jury. All of the above 46) Why do most companies choose not to pursue fraudsters for repayment? (2pts) Most fraudsters do not have the assets to repay even if found guilty. Most companies have insurance to cover the loss. Most fraudsters voluntarily repay what they have stolen. The first two (2) options are correct. None of the above 47) Wh o is 1233.3 (a) of Title 12 (Banks and Banking) of the U.S. Electronic Code of Federal Regulations applicable to? (2pts) All businesses. Federal and State Agencies. Regulated entities. Local and County Agencies. All of the above 48) By filing Form 3949-A with the IRS, what might this do for the owners of the company? (2pts) It can help delay interest and penalties on the taxes due. It can help the IRS initiate proceedings against the fraudster. It can help bolster an argument that the owners and managers were victims. All of the above 49) The Trust Fund Recovery Penalty holds responsible persons accountable. Who are they? (2pts) Owners. Officiers. Supervisors. All of the above 50) For income tax purposes fraudulent losses may be classified as: (2pts) Deductions. Offsets to reportable revenues. Reductions in retained earnings. The first two (2) options are correct. All of the above