Multiple Choice Questions:
1. Which of these does vertical ratio analysis involve?
a. A columnar approach to analytical review.
b. A within-statement approach to analytical review.
c. A year-to-year approach to analytical review.
d. None of the above.

2. Analytical procedures are comparisons of recorded amounts to which of the following?
a. Standard amounts as determined by generally accepted accounting principles.
b. Similar amounts known not to contain errors.
c. Amounts expected by auditors.
d. None of the above.

3. Which of the following does tracing involve?
a. Following the flow of information beginning with the financial statements and going back through the system to the source documents.
b. Following the flow of information beginning with the source documents and fol-lowing the flow of information forward through the system to the financial statements.
c. Applying analytical procedures to the financial statements.
d. Using surveillance to observe the steps of a suspect as he commits the crime.

4. Making a surprise count is a technique that can be used to:
a. Account for understated liabilities.
b. Determine why inventory is missing.
c. Determine whether a difference exists between tangible assets and accounting records.
d. Locate overstated inventory.

5. The likelihood that a forensic accountant’s judgment based on a sample differs from the judgment based on an examination of the complete population is called:
a. Difference estimation.
b. Discovery sampling.
c. Sampling risk.
d. Judgmental