TestBankfor j j j
ForensicAccoun j
ting and FraudE
j j j
xamination, 2e R j j
ichard Riley, Ma j j
ry-
Jo Kranacher (A
j j
ll Chapters)
j
,TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
CHAPTERj1
Modulej1
1. WhichjofjthejfollowingjisjNOTjonejofjthejfourjessentialjelementsjofjfraudjunderjcommonjlaw?
A. Ajmaterialjfalsejstatement
B. Reliancejonjthejfalsejstatementjbyjthejvictim
C. Knowledgejthatjthejstatementjwasjfalsejwhenjitjwasjspoken
D. Usejofjemail,jwire,jorjtelephonejwithjajcriminaljintentjtojdeceive
2. Thej“feloniousjstealing,jtakingjandjcarrying,jleading,jriding,jorjdrivingjawayjwithjanother’sj
property,jwithjthejintentjtojconvertjitjorjdeprivejthejownerjthereof”jisjthejlegaljdefinitionjof:
A. Embezzlement
B. Tort
C. Larceny
D. Fraud
3. Ajfiduciaryjisjsomeonejwho:
A. Swearsjanjoathjbeforejtakingjoffice
B. Actsjforjthejbenefitjofjanother
C. Betraysjthejtrustjofjanother
D. Controlsjaccessjtojanjorganization’sjcashjorjassets
4. Anjunauthorizedjassumptionjandjexercisejofjthejrightjofjownershipjoverjgoodsjorjpersonaljch
attelsjbelongingjtojanother,jtojthejalterationjofjtheirjconditionjorjthejexclusionjofjthejowner’sjri
ghtsjisjthejdefinitionjof:
A. Collusion
B. Concealment
C. Capitaljmisappropriation
D. Conversion
5. Thejintentional,jdeliberatejmisstatement,jorjomissionjofjmaterialjfactsjorjaccountingjdatajthatj
isjmisleadingjand,jwhenjconsideredjwithjalljthejinformationjmadejavailable,jthatjwouldjcausej
thejreaderjtojchangejorjalterjhisjorjherjjudgmentjorjdecisionjisjdefinedjbyjthejAssociationjofjCer
tifiedjFraudjExaminersjas:
A. Financialjstatementjfraud
B. Financialjstatementjmisstatement
C. Financialjstatementjconcealment
D. Financialjstatementjre-statement
1jofj11
,TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
6. Whichjofjthejfollowingjisjanjexamplejofjfinancialjstatementjandjreportingjfraud?
A. Failingjtojpostjauditjresultsjonjthejcompany’sjwebsite
B. Debtjratiojisjmateriallyjhigherjthanjindustryjstandards
C. Improperjtimingjofjrevenuejandjexpensejrecognition
D. Netjincomejforjanyjquarterlyjfilingjisj17%jorjmorejbelowjanalystjpredictions
7. Thejessentialjcharacteristicsjofjfinancialjstatementjfraudjare:
A. Thejmisstatementjisjmaterialjandjintentionaljandjthejusersjofjthejfinancialjstat
ementsjarejinvestorsjinjpubliclyjtradedjcompanies.
B. Thisjmisstatementjisjmaterialjandjintentionaljandjthejpreparersjofjthejfinancialjstat
ementsjhavejajfiduciaryjobligationjtojthejorganization.
C. Thejmisstatementjisjmaterialjandjintentionaljandjthejpreparersjofjthejfinancialjstateme
ntsjfailjtojreportjthejmisstatementjtojthejSECjorjotherjapplicablejauthority.
D. Thejmisstatementjisjmaterialjandjintentionaljandjthejusersjofjthejfinancialjstat
ementsjhavejbeenjmisled.
8. AsjajresultjofjthejSarbanes-
OxleyjActj(2002),jwhichjofjthejfollowingjbecamejpartjofjthejbusinessjlandscape?
A. Assessmentjofjinternaljcontrols,jpreservationjofjevidence,jwhistleblowerjprotectionjan
djincreasedjpenaltiesjforjsecuritiesjfraud
B. Mandatoryjseparationjofjduties,jtwo-
factorjauthenticationjforjonlinejtransactions,jandjprohibitionjofjfraudulentjfinancialjr
eporting
C. Mandatoryjquarterlyjreportingjofjshelljcompanyjbeneficialjownership,jmandatoryjcri
minaljbackgroundjchecksjonjalljpubliclyjtradedjcompanyjofficersjandjdirectors,jandja
nnualjreviewjofjinternaljcontrolsjbyjthejSEC
D. Auditingjfirmjcompetencejcertification,jannualjdisclosurejofjconflictsjofjinterestjbyjthej
boardjofjdirectors,jprohibitionjofjillegaljgratuitiesjandjpenaltiesjforjwhistleblowers
9. Thejoccupationaljfraudjandjabusejclassificationjsystemj(fraudjtree)jarrangesjor
ganizationaljfraudsjinjwhichjthreejcategories?
A. Thejact,jconcealment,jandjconversion
B. Existencejofjajfiduciaryjrelationship,jbreachjofjduty,jharmjtojthejplaintiffjorjbenefitjtojth
ejfiduciary
C. Assetjmisappropriation,jcorruption,jandjfinancialjstatementjfraud
D. Incentive,jopportunity,jandjrationalization.
10. Internaljfraudjcommittedjbyjonejorjmorejemployeesjofjanjorganizationjisjmorejcommonlyjrefe
rredjtojas:
A. Fiduciaryjbreachjandjembezzlement
B. Insiderjtradingjandjmarketjtiming
2jofj11
, TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
C. Occupationaljfraudjandjabuse
D. Checkjtamperingjandjbillingjschemes
11. Thejapproachjtojinvestigatingjfraudjrecommendedjbyjthejtext:
A. Identifyjthejspecificjlawjthatjwasjviolated
B. Examinejrelevantjevidencejwithjanjeyejtowardjdemonstratingjthreejattributesjofjfra
ud
C. Deferjdecisionsjthatjarejsuitedjtojanjattorney’sjexpertise
D. Providejreasonablejevidencejinjsupportjofjanyjopinionjofjguilt
12. Thejthreejattributesjofjajfraudjare:
A. Thejschemejorjfraudjact,jthejconcealmentjactivity,jandjthejconversionjorjbenefit.
B. Thejmotive,jrationalizationjandjopportunity.
C. Thejintent,jthejplanning,jandjthejexecutionjofjajfraudulentjact.
D. Assetjmisappropriations,jcorruption,jandjfinancialjstatementjfraudjandjotherjfra
udulentjstatements.
13. Whojsaid,j“Whitejcollarjcriminalsjconsiderjyourjhumanityjasjajweaknessjtojbejexploited
…”?
A. Dr.jJosephjT.jWells
B. SherronjWatkins
C. SamjE.jAntar
D. AndrewjFastow
Modulej2
14. Forensicjaccountingjisjthejapplicationjofjfinancialjprinciplesjandjtheoriesjtojfactsjorjhyp
othesesjinjajlegaljdisputejandjconsistsjofjtwojprimaryjfunctions:
A. Litigationjadvisoryjservicesjandjinvestigativejservices
B. Expressingjanjopinionjofjguiltjorjinnocencejinjcourtjregardingjauditjresultsjandjdoc
umentingjthejstepsjtakenjtojreachjthatjopinion
C. SubjectingjaccountingjdatajtojajBenfordjAnalysisjandjexplainingjthejresultsjtojajjud
gejorjjury
D. Providingjcourtroomjtestimonyjandjadministrativejtechnicaljguidancejtojattorneys
15. ForensicjandjValuationjServicesj(FVS)jprofessionalsjcanjexpectjthat:
A. Theirjopinionjwilljbejcarefullyjnotedjinjcourt.
B. ThejattorneyjforjopposingjcounseljtojdeferjtojthejFVSjprofessional’sjexpertjopinionjonj
mattersjpertainingjtojforensicjaccounting.
C. Theirjworkjwilljbejcarefullyjscrutinizedjbyjthejopposingjsidejandjthatjengagementsjarej
adversarialjinjnature.
3jofj11
ForensicAccoun j
ting and FraudE
j j j
xamination, 2e R j j
ichard Riley, Ma j j
ry-
Jo Kranacher (A
j j
ll Chapters)
j
,TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
CHAPTERj1
Modulej1
1. WhichjofjthejfollowingjisjNOTjonejofjthejfourjessentialjelementsjofjfraudjunderjcommonjlaw?
A. Ajmaterialjfalsejstatement
B. Reliancejonjthejfalsejstatementjbyjthejvictim
C. Knowledgejthatjthejstatementjwasjfalsejwhenjitjwasjspoken
D. Usejofjemail,jwire,jorjtelephonejwithjajcriminaljintentjtojdeceive
2. Thej“feloniousjstealing,jtakingjandjcarrying,jleading,jriding,jorjdrivingjawayjwithjanother’sj
property,jwithjthejintentjtojconvertjitjorjdeprivejthejownerjthereof”jisjthejlegaljdefinitionjof:
A. Embezzlement
B. Tort
C. Larceny
D. Fraud
3. Ajfiduciaryjisjsomeonejwho:
A. Swearsjanjoathjbeforejtakingjoffice
B. Actsjforjthejbenefitjofjanother
C. Betraysjthejtrustjofjanother
D. Controlsjaccessjtojanjorganization’sjcashjorjassets
4. Anjunauthorizedjassumptionjandjexercisejofjthejrightjofjownershipjoverjgoodsjorjpersonaljch
attelsjbelongingjtojanother,jtojthejalterationjofjtheirjconditionjorjthejexclusionjofjthejowner’sjri
ghtsjisjthejdefinitionjof:
A. Collusion
B. Concealment
C. Capitaljmisappropriation
D. Conversion
5. Thejintentional,jdeliberatejmisstatement,jorjomissionjofjmaterialjfactsjorjaccountingjdatajthatj
isjmisleadingjand,jwhenjconsideredjwithjalljthejinformationjmadejavailable,jthatjwouldjcausej
thejreaderjtojchangejorjalterjhisjorjherjjudgmentjorjdecisionjisjdefinedjbyjthejAssociationjofjCer
tifiedjFraudjExaminersjas:
A. Financialjstatementjfraud
B. Financialjstatementjmisstatement
C. Financialjstatementjconcealment
D. Financialjstatementjre-statement
1jofj11
,TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
6. Whichjofjthejfollowingjisjanjexamplejofjfinancialjstatementjandjreportingjfraud?
A. Failingjtojpostjauditjresultsjonjthejcompany’sjwebsite
B. Debtjratiojisjmateriallyjhigherjthanjindustryjstandards
C. Improperjtimingjofjrevenuejandjexpensejrecognition
D. Netjincomejforjanyjquarterlyjfilingjisj17%jorjmorejbelowjanalystjpredictions
7. Thejessentialjcharacteristicsjofjfinancialjstatementjfraudjare:
A. Thejmisstatementjisjmaterialjandjintentionaljandjthejusersjofjthejfinancialjstat
ementsjarejinvestorsjinjpubliclyjtradedjcompanies.
B. Thisjmisstatementjisjmaterialjandjintentionaljandjthejpreparersjofjthejfinancialjstat
ementsjhavejajfiduciaryjobligationjtojthejorganization.
C. Thejmisstatementjisjmaterialjandjintentionaljandjthejpreparersjofjthejfinancialjstateme
ntsjfailjtojreportjthejmisstatementjtojthejSECjorjotherjapplicablejauthority.
D. Thejmisstatementjisjmaterialjandjintentionaljandjthejusersjofjthejfinancialjstat
ementsjhavejbeenjmisled.
8. AsjajresultjofjthejSarbanes-
OxleyjActj(2002),jwhichjofjthejfollowingjbecamejpartjofjthejbusinessjlandscape?
A. Assessmentjofjinternaljcontrols,jpreservationjofjevidence,jwhistleblowerjprotectionjan
djincreasedjpenaltiesjforjsecuritiesjfraud
B. Mandatoryjseparationjofjduties,jtwo-
factorjauthenticationjforjonlinejtransactions,jandjprohibitionjofjfraudulentjfinancialjr
eporting
C. Mandatoryjquarterlyjreportingjofjshelljcompanyjbeneficialjownership,jmandatoryjcri
minaljbackgroundjchecksjonjalljpubliclyjtradedjcompanyjofficersjandjdirectors,jandja
nnualjreviewjofjinternaljcontrolsjbyjthejSEC
D. Auditingjfirmjcompetencejcertification,jannualjdisclosurejofjconflictsjofjinterestjbyjthej
boardjofjdirectors,jprohibitionjofjillegaljgratuitiesjandjpenaltiesjforjwhistleblowers
9. Thejoccupationaljfraudjandjabusejclassificationjsystemj(fraudjtree)jarrangesjor
ganizationaljfraudsjinjwhichjthreejcategories?
A. Thejact,jconcealment,jandjconversion
B. Existencejofjajfiduciaryjrelationship,jbreachjofjduty,jharmjtojthejplaintiffjorjbenefitjtojth
ejfiduciary
C. Assetjmisappropriation,jcorruption,jandjfinancialjstatementjfraud
D. Incentive,jopportunity,jandjrationalization.
10. Internaljfraudjcommittedjbyjonejorjmorejemployeesjofjanjorganizationjisjmorejcommonlyjrefe
rredjtojas:
A. Fiduciaryjbreachjandjembezzlement
B. Insiderjtradingjandjmarketjtiming
2jofj11
, TestjbankjprojectjforjForensicjAccountingjandjFraudjExaminationj(2ndjEd.)jbyjMary-
JojKranacherjandjDickjRileyj TestjbankjwrittenjbyjBrianjL.jCarpenter,jPhD,jCFEj∙j(989)j205-
4182j∙
C. Occupationaljfraudjandjabuse
D. Checkjtamperingjandjbillingjschemes
11. Thejapproachjtojinvestigatingjfraudjrecommendedjbyjthejtext:
A. Identifyjthejspecificjlawjthatjwasjviolated
B. Examinejrelevantjevidencejwithjanjeyejtowardjdemonstratingjthreejattributesjofjfra
ud
C. Deferjdecisionsjthatjarejsuitedjtojanjattorney’sjexpertise
D. Providejreasonablejevidencejinjsupportjofjanyjopinionjofjguilt
12. Thejthreejattributesjofjajfraudjare:
A. Thejschemejorjfraudjact,jthejconcealmentjactivity,jandjthejconversionjorjbenefit.
B. Thejmotive,jrationalizationjandjopportunity.
C. Thejintent,jthejplanning,jandjthejexecutionjofjajfraudulentjact.
D. Assetjmisappropriations,jcorruption,jandjfinancialjstatementjfraudjandjotherjfra
udulentjstatements.
13. Whojsaid,j“Whitejcollarjcriminalsjconsiderjyourjhumanityjasjajweaknessjtojbejexploited
…”?
A. Dr.jJosephjT.jWells
B. SherronjWatkins
C. SamjE.jAntar
D. AndrewjFastow
Modulej2
14. Forensicjaccountingjisjthejapplicationjofjfinancialjprinciplesjandjtheoriesjtojfactsjorjhyp
othesesjinjajlegaljdisputejandjconsistsjofjtwojprimaryjfunctions:
A. Litigationjadvisoryjservicesjandjinvestigativejservices
B. Expressingjanjopinionjofjguiltjorjinnocencejinjcourtjregardingjauditjresultsjandjdoc
umentingjthejstepsjtakenjtojreachjthatjopinion
C. SubjectingjaccountingjdatajtojajBenfordjAnalysisjandjexplainingjthejresultsjtojajjud
gejorjjury
D. Providingjcourtroomjtestimonyjandjadministrativejtechnicaljguidancejtojattorneys
15. ForensicjandjValuationjServicesj(FVS)jprofessionalsjcanjexpectjthat:
A. Theirjopinionjwilljbejcarefullyjnotedjinjcourt.
B. ThejattorneyjforjopposingjcounseljtojdeferjtojthejFVSjprofessional’sjexpertjopinionjonj
mattersjpertainingjtojforensicjaccounting.
C. Theirjworkjwilljbejcarefullyjscrutinizedjbyjthejopposingjsidejandjthatjengagementsjarej
adversarialjinjnature.
3jofj11
