Forensic Accounting Quiz

What skills does forensic accounting utilize to examine a company's financial records?

• Communication, leadership, and marketing skills

• Accounting, auditing, and investigative skills

• Computer programming, data analysis, and creative thinking

• Legal knowledge, interviewing, and negotiation skills

Which organizations can conduct forensic accounting examinations?

• The Securities and Exchange Commission (SEC) only

• Certified public accountants (CPAs) only

• Banks only

• The Securities and Exchange Commission (SEC), certified public accountants (CPAs), and banks

What is the purpose of forensic accounting?

• To prepare financial statements for public release

• To identify fraud and errors in a company's financial records

• To provide investment advice to clients

• To conduct regular audits for tax purposes

How can forensic accounting help in cases where customers are wrongly charged?

• By establishing a system where a random selection of invoices is sent to customers for feedback

• By reviewing the customer feedback forms regularly

• By establishing a system where a random selection of invoices is reviewed

• By reviewing the customer invoices against the company's published prices

What is the purpose of a parts/inventory reconciliation?

• To ensure that the marketing department is aware of inventory levels

• To reconcile the differences in employee work schedules

• To reduce inventory shrinkage and save the company money

• To update the company's website with the latest product information

Why is it important for companies to regularly check for employees leaving early without permission?

• To ensure that employees are overpaid

• To maintain a balance of trust and checks and balances

• To allow employees to take advantage of vacation and sick days

• To decrease the number of paid days off

What is the purpose of bank reconciliation?

• To ensure that employees are paid correctly

• To compare the company's bank statement with the accounting records

• To check for the correct amount of cash in the bank

• To identify employees leaving early

What is an internal control?

• A process to manage employee attendance

• A method to reconcile bank statements

• A system that guards against fraud and protects the company's cash

• A way to ensure all employees are paid equally

What might be a reason for a bank balance not matching the cash on hand?

• The bank has made an error in recording cash entries

• All checks written have been cashed immediately

• There is no need for reconciliation as the amounts always match

• Deposits and checks are always processed correctly

What does "deposit in transit" refer to?

• Money that has been withdrawn but not yet recorded

• Money that has been recorded but not yet deposited

• Money that a company has received and reported as cash on its balance sheet but is not yet on the bank statement

• Money that has been deposited and immediately appears on the bank statement