Effective Forensic Accounting Strategies for Fraud Detection
School
Defence Authority College of Business**We aren't endorsed by this school
Course
ACCOUNTING 123
Subject
Accounting
Date
Dec 10, 2024
Pages
2
Uploaded by SargentRose25212
Fraud Detection Forensic Accounting Strategies16.What is a common indicator of potential financial statement fraud?A) Consistent revenue growthB) Frequent changes in accounting policiesC) Unexplained discrepancies between cash flow and net income (Correct)D) An increase in sales personnel17.In the case of the Enron scandal, what forensic accounting technique was crucial in uncovering fraud?A) Ratio analysisB) Trend analysisC) Document examination and analysis (Correct)D) Market research18.What strategy can be employed to identify inflated expenses in financial reports?A) Comparing actual expenses against budgeted amounts (Correct)B) Reviewing sales revenueC) Analyzing market trendsD) Performing a physical inventory count19.Which of the following is a typical sign of employee embezzlement?A) Regular auditsB) Sudden lifestyle changes in employees (Correct)C) Consistent team performanceD) Open communication in the workplace20.How can forensic accountants utilize data analytics to detect fraud?A) By making random assumptionsB) By analyzing large datasets for patterns and anomalies (Correct)C) By focusing solely on historical dataD) By avoiding technology21.What is the purpose of a forensic accounting investigation during a mergeror acquisition?A) To identify potential synergiesB) To assess the validity of financial statements (Correct)C) To create marketing strategiesD) To restructure the management team22.In a case of suspected fraud, which of the following actions should be taken first?A) Confront the suspectB) Collect and preserve evidence (Correct)C) Report to law enforcementD) Inform the media23.What technique is commonly used to detect anomalies in payroll?A) Horizontal analysisB) Benford's Law analysis (Correct)C) Flow of funds analysisD) Ratio analysis24.Which of these is an example of a forensic accounting tool?A) Microsoft Excel (Correct)B) Adobe Photoshop
C) Google ChromeD) Microsoft PowerPoint25.In the context of fraud detection, what does 'whistleblowing' refer to?A) Reporting to market analystsB) Informing authorities about misconduct (Correct)C) Conducting internal auditsD) Analyzing financial statements26.What is an important factor in maintaining the integrity of forensic accounting investigations?A) Transparency and thorough documentation (Correct)B) Speed of investigationC) Limited communication with stakeholdersD) Reliance on personal judgment27.Which of the following scenarios might warrant a forensic accounting investigation?A) A company launches a new productB) A sudden drop in stock price with no clear explanation (Correct)C) A quarterly sales increaseD) A successful marketing campaign28.What role does technology play in modern forensic accounting?A) It complicates investigationsB) It is only used for data entryC) It enhances the efficiency and accuracy of fraud detection (Correct)D) It replaces the need for auditors29.Which common fraud scheme involves manipulating financial data to mislead stakeholders?A) KickbacksB) Financial statement fraud (Correct)C) Money launderingD) Asset misappropriation30.In forensic accounting, what is the significance of establishing a 'fraud triangle'?A) It helps to create financial forecastsB) It identifies the three components of fraud: opportunity, motivation, and rationalization (Correct)C) It serves as a budgeting toolD) It is a legal requirement in investigations