Question : 11) How does horizontal analysis of financial statements help forensic : 1222598

11) How does horizontal analysis of financial statements help forensic accountants in their investigations?

A) It compares key financial statement items over time to identify changes.

B) It uses Dupont model to calculate and compare the return on equity.

C) It helps forensic accountants in identifying fraudulent journal entries.

D) It allows the comparison of financial statements regardless of firm size.

12) Shiny Toys had failed to meet the projected revenues for the third year in a row. Yin, the owner, suspects Ginny, his long-time attendant, of skimming cash from the cash register with possible assistance from Aton, the cashier. Ginny is the only person apart from Yin and Anton who has the key to the shop. Rita, who comes to sweep the shop every morning, had seen Ginny hover around the cash register when Aton was at lunch. Yin enlists the help of a forensic accountant to investigate the possibility of a fraud. Which of the following statements are true?

A) Rita will be considered a neutral third party.

B) Ginny will be considered a suspected co-conspirators.

C) Yin will be considered the target.

D) Aton will be considered a corroborative witness.

13) An artful plot or plan, usually to deceive others is called a

A) fraud scheme.

B) fraud hypothesis.

C) fraud arbitration.

D) fraud mediation.

14) Which of the following scenarios involves skimming?

A) Ian deducted cash from check deposits of the company.

B) Keith removed cash from the safe after it had been entered into the cash book.

C) Natalie removed cash from the register before the entries were made into the books of accounts.

D) Olivia made false entries in a cash register to conceal the cash she removed without authorization.

15) Which of the following terms describes the act of stealing cash revenue after it has been recorded in the accounting system?

A) cash larceny

B) register disbursement

C) less cash scheme

D) skimming

16) Which of the following terms describes a fraud scheme in which two conspiring companies exchange payments and services for the sole purpose of inflating revenues?

A) billing scheme

B) kickback

C) switch contract

D) swap transaction

17) Which of the following is an example of false credits/discounts?

A) Bjorn issued many sales invoices in the name of “Power Top Agency.” However, no such agency existed, and the invoices were raised for overstating the revenue of the company.

B) Russell recorded a sale of $10,000 as sale of $9,000 and $1,000 as sales discount. However, no such discount was provided to the customer.

C) Shun altered a few adjusting entries in the company’s cash books to conceal $4,000 that he had removed from the cash register.

D) Armin is given a reimbursement for the medical expenses incurred by her and her family. She inflated her hospital bills to the extent of $1,500 to obtain a higher amount from the company.

18) A ________ is a payment back by a seller of a portion of the purchase price to a buyer to induce purchase or influence future purchases.

A) false discount

B) expense reimbursement

C) kickback

D) check tampering

19) Which of the following is a rate of interest, prescribed by the applicable state (or federal) statute, that is applied to a determined amount of economic loss?

A) federal rate

B) economic rate

C) statutory rate

D) penal rate

20) Which of the following is a difference between mediation and arbitration?

A) Mediation is a nonbinding structured process, whereas arbitration is a binding process.

B) Mediation is done in front of a panel, whereas arbitration is facilitated by an independent third party.

C) Mediation is generally time-consuming, whereas arbitration takes significantly less time.

D) Mediation is completely flexible, whereas arbitration is comparatively rigid.

21) Which of the following is true of arbitration?

A) It is formal as compared to a trial.

B) It is focused on fact finding.

C) It is less expensive than mediation.

D) It is a nonbinding structured process.

22) Which of the following statements comparing alternative dispute resolution (ADR) with litigation is true?

A) ADR is more expensive than litigation.

B) ADR is more time-consuming than litigation.

C) Litigation is public whereas ADR maintains privacy.

D) Litigation has complete flexibility whereas ADR has limited flexibility.