Forensic Accounting Final Exam [ Study] 100% Correct
6 views 0 purchase
Course
Forensic accounting
Institution
Forensic Accounting
Forensic Accounting Final Exam [2024-
2025 Study] 100% Correct
What are the different types of corruption schemes? *Ans* 1. Bribery
2. Kickback Schemes
3. Economic Extortion
4. Conflicts of interest
Bribery *Ans* the practice of offering something of value (usually money) in order to
influe...
Forensic Accounting Final Exam [2024-
2025 Study] 100% Correct
What are the different types of corruption schemes? *Ans* 1. Bribery
2. Kickback Schemes
3. Economic Extortion
4. Conflicts of interest
Bribery *Ans* the practice of offering something of value (usually money) in order to
influence an action or decision
Illegal Gratuities *Ans* Similar to bribery, except that there is no intent to influence a
particular business decision, but rather to reward someone for making a favorable decision.
What is meant by a conflict of interest? *Ans* an undisclosed economic or personal interest in
a transaction that adversely affects the company
Slush Fund *Ans* a non-company account from which illegal funds are transferred into
What is defined as "something of value?" *Ans* anything valuable enough to a person that
may be used to influence decisions
,How can conflicts of interest be prevented and detected? *Ans* - Company ethics policy that
addresses problems and illegalities with conflicts of interest
- policy requiring employees to complete an annual financial disclosure statement
- establish reporting hotline
- Periodically run comparisons between vendor and employee addresses and phone numbers
What is a kickback scheme? *Ans* Involves submission of false invoices for goods or
services and collusion between employees and vendors
How is a kickback scheme committed? *Ans* - Diverting business to specific vendors
- over billing by overstating cost or reflect fictitious sales in order to share profits with other
parties
What type of abuses may occur at the pre-solicitation stage of the bidding process?
*Ans* 1.Need Recognition scheme- Employee of purchasing company is paid to convince his
company that a particular project is necessary
- high requirements for inventory levels
- writing off large numbers of surplus for scrap
2. Specification scheme- specifications of contract are tailored to strengths of a particular
supplier
-using "pre-qualification" procedures to eliminate competition
- writing off vague specifications
, - bid splitting
Why is it problematic for an organization to set standards that are too high? *Ans* - might
cause employees to fail or to lie because they are not capable of meeting high standards set
How does the "perception of detection" impact fraud deterrence? *Ans* by implying that
employees are less likely to commit fraud because of the fear of being caught by internal controls
What is the difference between fraud prevention and fraud deterrence? *Ans* Fraud
deterrence- concept that employees will modify their behavior when they are aware of the
negative sanctions they may incur if they commit fraud
Fraud prevention- identification and the removal of the factors that are judged to enable fraud
Why might senior management overstate or understate business performance? *Ans* - they
believe that the current earnings are low compared to market expectations
- in order to meet requirements set by loan covenants, so the company doesn't have to pay
penalties
What are some of the ways in which financial statement fraud is committed? *Ans* -
recognizing revenue in the wrong accounting period
- recognize fictitious revenues by recording sales that never occurred
- improperly value their fixed assets or inventories in order to overstate or understate profits
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AceTests. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.49. You're not tied to anything after your purchase.
