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FORENSIC ACCOUNTING
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 PRACTICE BOOK» NOT FOR SALE
Contents

1 FORENSIC ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 FORENSIC ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
 1. FORENSIC ACCOUNTING
1.1 FORENSIC ACCOUNTING
1. Which prevention method is most effective
for preventing a non-cash asset misappro-
priation scheme?
A. Analyze trends on inventory write-offs
B. Conducting three way match verifica-
tion method (PO, DN, Invoice)
C. Segregation of Duties of key personnel
D. none of above
2. Which of the following statements best de-
scribes forensic accounting?
A. Forensic accounting is an accounting
discipline that deals with the preparation
and analysis of company financial reports
B. Forensic accounting relates to the use
of accounting principles to consolidate the
financial reports of banking, financial insti-
tutions and insurance companies
C. Forensic accounting is a scientific dis-
cipline that is mainly concerned with the
method of preparing a company’s financial
budget
D. Forensic accounting is an accounting
discipline that uses an approach to ac-
counting principles, analysis in legal ac-
1. C 2. D 3. C
NARAYAN CHANGDER
tions, and is often used to provide testi-
mony/expert witnesses in a trial process
related to acts of financial fraud.
3. Regarding the three elements in the fraud
triangle (fraudulent acts, concealment and
diversion/alteration), who is usually in
the best position to detect fraud:
A. Customers
B. Seller
C. Co-workers and direct superiors
D. Government
4. There are several requirements for audit
evidence that can be used as an adequate
basis to support audit conclusions, except:
A. Evidence is obtained from competent
parties
B. Evidence must be compelling
C. Evidence must be sufficient
D. The evidence must be relevant to the
point at issue
5. The purpose of preparing a fraud hypothe-
sis in planning an investigation is in order
to:
4. B 5. C
1.1 FORENSIC ACCOUNTING
A. To determine whether an investigative
audit can be carried out or not
B. To provide reasons for confiscating
documents
C. As temporary information that can ex-
plain facts/conditions that are suspected
to contain irregularities as a reference for
determining the next audit steps
D. To conduct interviews with coopera-
tive witnesses
6. Which of the following statements is the
best method for discovering internal fraud:
A. Surprise audit
B. Periodic employee transfers
C. Employees are required to take leave
periodically
D. All answers are correct
7. One way to detect a financial statement
fraud is by conducting a comparison of com-
pany’s financial data over the years. What
method of detection is this called?
A. Vertical Analysis
B. Vouching and Tracing
C. Horizontal Analysis
D. Recalculations
8. Bobi as the purchasing staff of a company
tend too inflate the company’s purchase
order of an item which Bobi will assume
the excess items for himself.What kind of
fraud scheme is this?
A. Sales skimming
B. Billing Schemes
C. Non-cash asset Misappropriation
D. none of above
9. The comprehensive fraud combat program
includes:
A. Prevention, development of control
systems, detection and investigation
6. D 7. C 8. B 9. B
3
B. Prevention, detection, investigation
and legal action
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C. Prevention, outreach, investigation
and legal action
D. Prevention, detection, investigation
and employee assistance program
10. What is the purpose of the article?
A. Give arguments in favor of the auditor
and the forensic accounting investigator
B. Discuss the similarities between the
forensic accounting and the patrolman
C. Inform about the different tasks of the
auditor
D. None
11. what does it mean inquiry in the text?
A. it is related to balance risk and expec-
tations
B. a range of scenenarios to investigate
different frauds
C. sample transactions done by the com-
pany
D. reseach about some irregular findings
12. In the finding material (position case and
modus operandi) of the investigative audit
it is necessary to disclose “SIADIBIBAG”
which is an abbreviation of:
A. Who, What, There, When, How
B. Who, What, Where, When, How
C. I, What, Where, When, How
D. Who, Brother, Where, When, How
13. When a company records a loan as rev-
enue, how it will impact the financial state-
ment?
A. Overstated Cash and Overstated Rev-
enue
B. Understated Liabilities and Under-
stated Cash
10. D 11. D 12. B 13. C 14. A
1.1 FORENSIC ACCOUNTING
C. Understated Liabilities and Overstated
Revenue
D. none of above
14. The objectives to be achieved in an inves-
tigative audit assignment are:
A. Reveal the truth
B. Finding state losses
C. Calculating state losses
D. Arrest perpetrators of criminal acts
15. Investigative audits carried out by internal
auditors emphasize aspects of control sys-
tem weaknesses in their recommendations
for improvement. Which of the following
statements is NOT the main objective of
disclosing incidents of fraud committed by
a forensic accountant/auditor?
A. Who did the fraud (Who)
B. How is the fraud method carried out
(How)
C. Why is fraud committed (Why)
D. When was the fraud committed
(When)
15. C
4
16. The investigation stage always starts
with the pre-planning stage. In the pre-
planning stage, activities carried out in-
clude:
A. Preparation of investigative work pro-
grams
B. Search for and find perpetrators of
fraud by applying investigative techniques
NARAYAN CHANGDER
C. Analysis of initial data/information
originating from certain sources, to deter-
mine whether or not an initial suspicion is
sufficient to carry out an investigative au-
dit
D. Actions to detect fraud
17. When someone force somebody else to
hand an amount of money or other items
that are ‘something of value’ in exchange
for a business (or other) opportunities,
what scheme is this called?
A. Bribery
B. Economic Extortion
C. Illegal Gratuities
D. Kickbacks
16. C 17. B