Explanation: A) Proactive employee strategies include preemployment screening, employee training, employee monitoring, perception of detection (through internal controls and external audits), and organizational culture.
Diff: 2
LO: 1-2
AACSB: Analytical Thinking
12) Which of the following forensic accounting services primarily focuses on determining who committed the fraud, the scheme of the fraud, the time frame and duration, how much was taken, and who else was involved?
A) fraud detection
B) fraud deterrence
C) fraud examination
D) fraud anticipation
Answer: C
Explanation: C) The primary focus of a fraud examination is to determine the following elements of the fraud: who committed the fraud, how they committed it (the fraud scheme), when it was committed (time frame and duration), how much was taken, and who else was involved.
Diff: 2
LO: 1-2
AACSB: Reflective Thinking
13) Which of the following forensic accounting investigation services includes proactive employee strategies such as preemployment screening, employee training, and employee monitoring strategies?
A) fraud detection
B) fraud deterrence
C) fraud examination
D) fraud anticipation
Answer: B
Explanation: B) Because fraud requires individual actors (the offenders), a reasonable starting point for fraud deterrence is employee relations. Proactive employee strategies include preemployment screening, employee training, employee monitoring, perception of detection (through internal controls and external audits), and organizational culture.
Diff: 2
LO: 1-2
AACSB: Reflective Thinking
14) Which of the following best describes a whistle blower complaint?
A) It is an informal disclosure of personal issues of an employee with other employees within an organization.
B) It is a disclosure by a person of wrong doing or misconduct within an organization.
C) It is an annual complaint forum designed to discuss issues of an organization.
D) It is a complaint raised by the SEC toward an organization.
Answer: B
Explanation: B) A whistleblower complaint is a disclosure by a person (usually an employee) of wrongdoing or misconduct within the organization.
Diff: 2
LO: 1-2
AACSB: Analytical Thinking
15) Which of the following is the most significant practice component of forensic accounting As indicated by the results of a 2011 AICPA survey?
A) bankruptcy
B) business valuations
C) insolvency and reorganization
D) computer forensic analysis
Answer: B
Explanation: B) The results of a 2011 American Institute of Certified Public Accountants survey indicate that business valuations are by far the most significant practice component.
Diff: 1
LO: 1-2
AACSB: Analytical Thinking
16) Which of the following are the two major components of forensic accounting services?
A) fraud detection services and fraud deterrence services
B) expert services and consulting services
C) investigative services and litigation services
D) fraud examination services and business valuations services
Answer: C
Explanation: C) Forensic accounting services are commonly divided into two major components: investigative services and litigation services.
Diff: 1
LO: 1-2
AACSB: Analytical Thinking
17) Which of the following is a difference between an external auditor and a forensic accountant?
A) An external auditor captures and records all economic transactions of the organization, whereas a forensic accountant ensures compliance with policy and procedures.