Question 1

Which of the following is an example of nonexistent data?

Accepted Answer

A)   The check slips for the month of June and July were misplaced. The bank maintains a copy of this at the client's request.
B)   Some entries were changed to reflect a higher value of assets. The invoices containing the original amount are yet to be altered.
C)   The client refused to divulge the details of the sale contract. The supplier does not have a copy of the contract.
D)   The company maintains documents supporting transactions only for three years. The transaction in question was made five years ago.E) All of the above
F) A) and B)

Question 2

Which of the following is true with regard to identifying themes while transcribing interviews?

Accepted Answer

A)   For less-structured interviews, themes could be based on experiences, behaviors, views, or any other factor that becomes apparent.
B)   Interview questions are a good starting point for identifying themes if the interview was semi-structured in nature.
C)   In a fact-finding interview, themes may simply emerge from the flow of conversation.
D)   The themes identified for the structure of the transcript may not always be in consistence with the objectives of the engagement.E) A) and B)
F) A) and C)

Question 3

As a part of a forensic accountant engagement, you interviewed all the first cousins of the subject. Which of the following types of data did you obtain?

Accepted Answer

A)   first-party data
B)   second-party data
C)   third-party data
D)   fourth-party dataE) All of the above
F) C) and D)

Question 4

Relationship charts, which illustrate relationships and flows, are a form of link analysis.

Accepted Answer

A) True 
 B)False

Question 5

In the context of a forensic accounting engagement, the terms method, tool, and technique can be used interchangeably.

Accepted Answer

A) True 
 B)False

Question 6

Rule 702 of Federal Rules of Evidence requires that

Accepted Answer

A)   the CPAs use complex technological analysis tools for gathering data.
B)   any qualitative data presented is supported by quantitative data.
C)   only direct evidence is used in a case.
D)   the expert testimony is the product of reliable principles and methods.E) A) and B)
F) None of the above

Question 7

What are the benefits of a written data analysis plan?

Accepted Answer

A written data analysis plan (document) ...

Question 8

Use of bank statements to confirm components of financial statements and tax returns is an example of third-party data.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a typical example of document dumping in litigation?

Accepted Answer

A)   Big Farm, Corp. reported that it has shredded all the original invoices provided by a particular vendor.
B)   Nyntal, Inc. kept all its old receipts, copies of contracts and agreements, bank slips and all other documents, created right from the inception of the company, in a separate warehouse.
C)   Sara requested Wilmerry, Inc. to produce four bank slips relating to the transactions under scrutiny. Wilmerry gave her all the bank slips of last two years.
D)   Quinn agreed with Kensington, Corp. to destroy the findings of the engagement and drown the documents collected during the investigation for a monetary benefit.E) A) and B)
F) None of the above

Question 10

Which of the following statements best describes the term subpoena?

Accepted Answer

A)   It is a court order issued by a judge authorizing a law enforcement agency to perform a search of a person or location and confiscate any evidence that is found.
B)   It is a document that directs the production of documents or other items.
C)   It is the tracing of the incremental effects of some initial stimulus.
D)   It is a legal notice directing the attendance of a person at a deposition or trial.E) B) and D)
F) B) and C)

Question 11

Which of the following statements is true with respect to reliability of data sources?

Accepted Answer

A)   First-party data have the highest reliability.
B)   Second-party data may have a higher level of reliability than first-party data.
C)   Third-party data are not very reliable as they can be influenced by the subject.
D)   Fourth-party data are vulnerable to manipulations by subject.E) C) and D)
F) B) and C)

Question 12

Which of the following is a purpose of document dumping?

Accepted Answer

A)   to get rid of unnecessary and outdated documents and retain only those documents that are relevant
B)   to conceal relevant and vital information from being tracked by the forensic accountants
C)   to destroy material documents that contain important data
D)   to make the document of interest more difficult to identifyE) None of the above
F) B) and D)

Question 13

Time is an objective measure, hence timeline data are always highly reliable. Examine the validity of this statement.

Accepted Answer

When timelines are used as evidence, it ...

Question 14

Which of the following is a difference between second-party data and third-party data?

Accepted Answer

A)   Second-party data are obtained from individuals or entities that are related to the subject, whereas third-party data are obtained from entities that maintain records regarding the subject.
B)   The advantage of second-party data is that it can be obtained independently by the forensic accountant, whereas the advantage of third-party data is that it is outside the subject's ability to manipulate.
C)   Second-party data falls under the realm of primary research, whereas third-party data falls under the realm of secondary research.
D)   Second-party data might require more time to obtain, whereas third-party data are readily available to the forensic accountant.E) B) and C)
F) A) and D)

Question 15

In civil cases, the availability of data depends on the engaging party.

Accepted Answer

A) True 
 B)False

Question 16

The end transcript of an interview is more important than the process of transcribing an interview.

Accepted Answer

A) True 
 B)False

Question 17

Diana, a forensic accountant, obtained the financial statements of Ryer Inc. from its accountant. She noted that Ryer generated a profit of $152.7 million in the previous year. This is an example of

Accepted Answer

A)   third-party data.
B)   quantitative data.
C)   fourth-party data.
D)   qualitative data.E) C) and D)
F) B) and D)

Question 18

Which of the following is the first step of data preparation?

Accepted Answer

A)   standardization of data
B)   creating a data inventory
C)   classification of data
D)   creating a databaseE) A) and D)
F) B) and C)

Question 19

Which of the following is a similarity between third-party data sources and fourth-party data sources?

Accepted Answer

A)   Both data sources may have some firsthand knowledge of the subject's activities.
B)   The information collected from both data sources does not reflect the actual activity of the subject.
C)   Data received from both data sources fall under the category of secondary research.
D)   Both data sources may involve associated costs.E) All of the above
F) B) and C)

Question 20

Which of the following is a drawback of link analysis?

Accepted Answer

A)   It fails to reveal unapparent relationships.
B)   It cannot be used in cases where the subject is unknown.
C)   Compared to other investigative techniques, it can be time-consuming.
D)   Too many links may affect the quality of the information.E) None of the above
F) A) and B)

Exam 8: Transforming Data Into Evidence Part 1

In the context of a forensic accounting engagement, the terms method, tool, and technique can be used interchangeably.

Correct AnswerverifiedShow Answer

Which of the following is a difference between second-party data and third-party data?

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Time is an objective measure, hence timeline data are always highly reliable. Examine the validity of this statement.

Correct AnswerverifiedWhen timelines are used as evidence, it ...View AnswerShow Answer

Which of the following is the first step of data preparation?

Correct AnswerverifiedShow Answer

The end transcript of an interview is more important than the process of transcribing an interview.

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Which of the following is a typical example of document dumping in litigation?

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Which of the following is a similarity between third-party data sources and fourth-party data sources?

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Which of the following is an example of nonexistent data?

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Which of the following is a purpose of document dumping?

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Relationship charts, which illustrate relationships and flows, are a form of link analysis.

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Rule 702 of Federal Rules of Evidence requires that

Correct AnswerverifiedShow Answer

Use of bank statements to confirm components of financial statements and tax returns is an example of third-party data.

Correct AnswerverifiedShow Answer

Which of the following statements best describes the term subpoena?

Correct AnswerverifiedShow Answer

Diana, a forensic accountant, obtained the financial statements of Ryer Inc. from its accountant. She noted that Ryer generated a profit of $152.7 million in the previous year. This is an example of

Correct AnswerverifiedShow Answer

In civil cases, the availability of data depends on the engaging party.

Correct AnswerverifiedShow Answer

Which of the following is true with regard to identifying themes while transcribing interviews?

Correct AnswerverifiedShow Answer

Which of the following statements is true with respect to reliability of data sources?

Correct AnswerverifiedShow Answer

As a part of a forensic accountant engagement, you interviewed all the first cousins of the subject. Which of the following types of data did you obtain?

Correct AnswerverifiedShow Answer

What are the benefits of a written data analysis plan?

Correct AnswerverifiedA written data analysis plan (document) ...View AnswerShow Answer

Which of the following is a drawback of link analysis?

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When timelines are used as evidence, it ...
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A written data analysis plan (document) ...
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Correct Answer
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