Questions and Answers of Financial Investigation And Forensic Accounting

Micro economics of crime deal with:a. Individualsb. National levelc. International leveld. Individuals and businesses
Arson only affects the victim of the crime. T or F
In closely held companies, skimming is primarily a crime against:a. A crime against the companyb. A crime against tax authoritiesc. A crime against the shareholdersd. Is not a crime.
A "bust out" is a form of:a. Bad business ventureb. Bankruptcy fraudc. Bad economic timesd. Bad management
What is "loan sharking"?
Credit card companies charge a high rate of interest to the cardholder. One of the primary reasons is:a. Need to have large profitsb. Need to cover large overhead expensesc. Need to compensate for
Credit cards are only stolen when the customer leaves them at the store where a purchase has been made. T or F
Stock manipulation is done with the broker and a customer. T or F
Narcotics causes the wealth of the community to be:a. Concentrated to a fewb. Spreads the wealth among the communityc. Has no effect on the communityd. Helps local government
Organized criminal organizations like to operate what type of legitimate businesses.a. Small businessesb. Large businessesc. Medium size businessesd. Cash oriented businesses
What are "ghost" employees?a. Workers who hide out on the premisesb. Workers who are religiousc. Workers who don't come to workd. Non-exist employees
What is a "chop" shop?a. A business that cuts up cars for parts.b. Another name for butcher shopc. A car repair shopd. A car parts store.
Macro economics of crime deals with the national and international levels. T or F
What major industries are not heavily infiltrated by organized crime?a. Constructionb. Waste removalc. Liquor retailing & wholesalingd. Manufacturing and mining
The Wharton School Economics estimates that organized crime accounts for what percent of GNP?a. 10%b. 5%c. 1%d. 1.13%
Most studies of organized crime centers on it's illegal income. What characteristics are missing on studies of organized crime activities?a. Involvement in legitimate businessesb. Identifying all
Organized crime on the international scale involves mostly what type of crime?a. Gamblingb. Narcoticsc. Loan sharkingd. Money laundering
Cocaine comes from coca plants. What countries are the principal producers of this plant?a. Canada, United States, Mexico, Puerto Ricob. Bahamas, Puerto Rico, Mexico, Costa Ricac. Colombia, Peru,
Morphine base drugs comes mostly from what areas of the world?a. South and Central Americab. Europe and North Africac. Caribbean basin and Central Americad. Middle East and Southeast Asia
What two countries where governments are being under siege by drug traffickers?a. United States and Canadab. Sicily and Colombiac. Bahamas and Panamad. Mexico and Guatemala
Identify five economic cost elements of crime that affect society.
What are the connecting factors for a fraud to take place?a. Money, greed, personb. Money, need, personc. Something of value, opportunity, and perpetratord. Something of value, greed, and perpetrator
What are the two financial motives for committing arson?a. Greed and revengeb. Revenge and insurance claimc. Greed and competitor eliminationd. Insurance claim and competitor elimination
Bankruptcy fraud has what prime characteristic?a. Creditors recovering part of their losesb. Hiding or nondisclosure of assets from creditorsc. Hiding assets from the courtd. Creditors don't recover
What are the elements of bribery?a. Offer and acceptance of money or favors for preferential treatmentb. Offer and acceptance of money to public officialc. Giving and receiving gifts to suppliersd.
What are the elements of loan sharking?a. Lending money without interestb. Lending money with low interest ratesc. Lending money at usury interest ratesd. Lending money at variable interest rates
A person who uses another person's credit card is committing credit card fraud. T or F
What is the difference between a prostitute and a panderer? Explain.
What are the signs of fencing?a. Costs are low, no invoices, no identified supplierb. Costs are low, business existence is long, no identified supplierc. Costs are high, business existence is short,
When a telemarketer calls and says "This deal is too good to be true.", this is an example of:a. Bust out artistb. Boiler room operatorc. Con artistd. An honest and sincere telemarketer
Pornography is a crime that sells:a. Sale of sex novels, magazines, photographs, and stag filmsb. Sale of best selling novels.c. Watching hit movies with sex scenesd. Selling law books
Gambling involves many facets. Which of the following are the most common facets of gambling.a. Cards, numbers, rouletteb. Numbers, cards, roulettec. Bookmaking, numbers, racesd. Cards, numbers, races
Skimming in a small business usually relates to what type of fraud:a. Company fraudb. Shareholder fraudc. Tax fraudd. Officer fraud
Labor racketeering provides illicit gains in three areas. They are:a. Extortion, employee fraud, and ghost employeesb. Kickbacks, embezzlement, and pension fund fraudc. Kickbacks, ghost employees,
What type of investigation does a stock fraud and manipulation require?a. A simple method of identifying sales prices.b. A complex method of identifying sales prices.c. A complex method of
Narcotics organizations are usually:a. Small, involving limited number of peopleb. Large, involving limited number of peoplec. Large, involving numerous people from all walks of lifed. Small,
Racketeering involves what type of crimes?a. Narcotic traffickingb. Gambling in its various formsc. The Mafia and other highly organized crime organizationsd. Any two acts of crimes involved by a
Financial data can have a major impact on racketeering cases since civil and criminal forfeitures come into play. T or F
What are the elements required for a Continuing Criminal Enterprise conviction? Explain.
A person calls up saying that he is requesting donations to the Police Athletic League. This organization is a profit organization. What type of fraud is the person committing?a. Wire fraudb.
Burglars steal goods for the purpose of:a. Personal useb. Business usec. Sale to individuals and pawn shopsd. Give to non-profit organizations
What are the elements of forgery?a. Falsely making or materially alterating a writingb. Intent to defraud another person's rightsc. Preparing a legal documentd. Exchanging something of value for a
One person offers another person a forged document which is known to be false. The other person rejects the forged document. Is this a crime of uttering? Y or N
What are the three elements of larceny?a. Wrongful taking and carrying away of another's personal propertyb. No consent of the property ownerc. Intent to deprive the owner of such property
What is one element of robbery?a. A felonious takingb. Use of actual or constructive forcec. No consent by the victimd. Personal property of valuee. Intent by the perpetrator to deprive the owner
What are the elements of tax evasion?a. A false return is filed with the taxpayer knowing it to be falseb. The returns is known to be false by the taxpayerc. Taxpayer omitted some income items.d.
Name the seven characteristics of a tax haven country.
Give one characteristic for each country listed below that would make it attractive for organized crime.1. Andorra.2. Bahamas.3. Barbados.4. Bermuda.5. Cayman Islands.6. Costa Rica.7.
When a fraud examiner discovers transactions with an offshore entity, what fraud indicators should the fraud examiner look for?
What is the purpose of the Mutual Legal Assistance Treaties?a. Obtain tax informationb. Provide direct communication with defense attorneys.c. Over come bank secrecy laws.d. Exchange information on
What is the purpose of the Financial Action Task Force?a. Provide legal assistance to another country.b. Coordinating international money laundering efforts.c. Share criminal information.d. Provide
All evidence means?a. All physical matters that establish a matter or factb. All means that disprove a matter or factc. All oral matters that establish a matter or factd. All means which an alleged
Direct evidence proves the existence of a matter or fact by:a. Without any inference or presumptionb. With inference or presumptionc. With only inference but no presumptiond. With inference or
Circumstantial evidence tends to prove the existence of a principal fact by inference. T or F
Evidence can be classified as:a. Oral, physical, and non-physicalb. Oral, documentary, and realc. Documentary, real, and physicald. Documentary, real, and non-physical
To be admissible in court, it must be:a. Real, material, and relevantb. Relevant, immaterial, and competentc. Relevant, material and competentd. Real, material and competent
Evidence is material if it is essential to the subject matter. T or F
Relevancy relate evidence to what?a. A principal matterb. A principal factc. A relevant matterd. A relevant fact
The competency of evidence relates to it being:a. Legally admissible in courtb. Relevantc. Materiald. Relevant and Material
Define hearsay evidence.
A confession is considered to be:a. Hearsay evidenceb. Admissible evidencec. Discredit a witnessd. Both b and c
There are two exceptions to the hearsay rule. What are the rule exceptions. Explain.
Why would a defendant want to have a witness testify in court about his good reputation in the community. Explain.
Testimony in another or same matter by a witness is not admissible in court. T or F
The Best Evidence Rule applies to:a. Oral testimonyb. Physical evidencec. Documentary evidenced. Photographs
What is secondary evidence?a. Testimony onlyb. Testimony and a copy of a documentc. Copy of a document onlyd. Original document
The regular course of business rule relies on records made during the normal course of business to be admissible in court. The basis for this rule is:a. The records are made on a day-to-day basis.b.
The Greenberg Rule relates to:a. Authenticityb. Witness must testify and authenticate documentsc. Witness does not have to testify about documentsd. Documents authenticate themselves
Public records are admissible in court if they are:a. Authenticatedb. Reliablec. Materiald. Relevant
The chain of custody relates to consecutive custodians of physical or documentary evidence.To be admissible in court, it must be shown that:a. The evidence is in the same condition as at the time the
Privileged communication rules do not apply in the federal judicial system for which of the following:a. Attorney - clientb. Husband - wifec. Accountant - clientd. Physician - patient
Foreign evidence is not admissible. T or F
Foreign testimony or documents must be certified. Who is responsible for certifying foreign testimony and documents?a. The Prosecutorb. The Defense Attorneyc. The Judged. A consular officer
The fraud examiner should destroy all his interview notes after they have been typed up. T or F
What is the objective of the Tax net worth method?a. Identify assets and liabilitiesb. Identify gross incomec. Identify assets and unreported taxable incomed. Identify assets, liabilities, and net
What is the objective of the Rico net worth method?a. Identify assets and liabilitiesb. Identify assets and determine illegal incomec. Identify assets and gross incomed. Identify assets, liabilities,
When and what case did the U.S. Supreme Court hear the first net worth case?a. In 1943, US v Johnsonb. In 1931, US v Al Caponec. In 1954, US v M. L. Hollandd. Never has seen a net worth case
The U.S. Supreme Court, in 1954, pointed out the dangers that must be kept in mind for an adequate appraisal of facts in individual cases. List and explain these dangers.
The fraud examiner is examining a particular individual, but finds bank records and other transactions are intermingled with numerous other family members. The fraud examiner can use:a. Net worth on
The cost of living data that is supplied by the Bureau of Labor Statistics can be used in both civil and criminal cases. T or F
The net worth method is commonly used in tax cases, however, what other type of cases can this method be used or should be used when circumstances dictate?a. Rico Cases onlyb. Continuing Criminal
What principles are used in Rico net worth cases?a. General Accepted Accounting Principlesb. Tax code and regulationsc. The source and use of funds principles.d. No principles are involved.
Give examples of how the cash hoard defense can be negated by the fraud examiner.
Continued understatement of inventory in a regular corporation will have what effect on the individual net worth?a. Noneb. Understate the net worthc. Overstate the net worthd. Increase corporate
In the Rico net worth method, a sole proprietorship requires the fraud examiner to make adjustments. What are these adjustments?a. Combine business assets and liabilities with personal assets and
When are deferred gains and prepaid expenses recognized on the Rico net worth?a. They are never recognizedb. They are recognized in accordance with GAAPc. They are recognized in the period
For tax purposes, capital losses are recognized when?a. Are not recognizedb. Are recognized in full when incurredc. Are recognized in full three years backd. Are recognized up to $3,000 each year,
In Tax cases, income items are either recognized as non-taxable source or are not recognized at all. Which of the following income items are not recognized?a. Tax exempt interestb. Life insurance
Whether tax or Rico, there maybe difference between the civil case and the criminal case.Which of the following is a reason for such difference?a. All evidence is admissible for bothb. Witnesses have
Give five common defenses that a subject can bring up.
The Expenditure method is a derivation of which method?a. Bank deposit methodb. Gross profit methodc. Net worth methodd. Commission method
Under what conditions should the expenditure method be used?a. No books and records are maintainedb. No books and records are availablec. No visible or identifiable assetsd. Subject spends beyond his
What are the common defenses against the expenditure method?a. Cash hoardb. The same defenses as the net worth methodc. There are no defensesd. No assets
What are phantom figures?a. Prepaid expenses and deferred gainsb. Credit card chargesc. Depreciation, depletion, and amortizationd. Profits from a sole proprietorship
How does the expenditure method present loan balances?a. It does not present loan balancesb. It only shows the original loan amountc. It shows balances after principal reductionsd. Loans are not
How does the expenditure method present the purchase and sale of assets?a. It shows the cost, but not saleb. It doesn't show the cost, but shows the sale proceedsc. It shows the cost, and the gain on
Changes in bank account balance from the beginning and end of the year are shown on the expenditure method. T or F
Market values, instead of actual costs, can be used under what circumstances?a. Never can be used.b. When use is necessary, i.e. contraband items.c. Can be usedd. Should always be used
Cash on hand balances are presented on the expenditure method. T or F
In analyzing inventory, the fraud examiner should do:a. Determine increase/decrease in balancesb. Determine year-end balances for presentationc. Determine year-end balances, and present the

Showing 100 - 200 of 524