Ch.1-4 - ACCT 562 Chapter 1 3 Forensic accounting includes...

This preview shows page 1 - 3 out of 5 pages.

ACCT 562 Chapter 1 3. Forensic accounting includes components such as time, purpose, and peremptory. 4. A financial audit does not look at every transaction made, instead it gives a sampling of activity. On the other hand, a forensic audit gives specific items of the records and is able to show how things do or do not add up. Therefore, it is easily seen that a forensic audit takes longer than a financial audit. Also, because a financial audit does not look at every transaction it can be exploited easily. 17. The two broad areas of forensic accounting are investigative and litigation support. Litigation includes damages, valuation, antitrust analyses, general consulting, accounting, and analyses. 30. When a forensic accountant is brought into an audit engagement and conducting a separate investigation, consulting standards apply. This is because it is a litigation services engagement, which removes the auditing standards all together. 56. a 68. The FCPA was put into act in 1977, after discoveries such as the Watergate scandal during an SEC investigation. The purpose of the FCPA is to get rid of bribes and kickbacks in business practices. The FCPA forbids companies to retain business by paying bribes to foreign government or political officials. Chapter 2 17. No, a forensic accountant should not express an opinion on whether a person or party is guilty or innocent. The accountant is bound by the CFE Code of Ethics. 27. a.) 1,3888 of occupational fraud b.) 5% c.) $140,000 d.) 18 months e.) 43.3% f.) banking and financial services; government and public administration g.) internal control Chapter 3 3. The six-legged stool of the financial reporting process includes six groups of corporate governance. These groups are the board of directors, the audit committee, the top management team, internal auditors, external auditors, and certain governing bodies. 4. The three M’s of financial reporting fraud are manipulation, misrepresentation, and misapplication that are intentional. Manipulation is falsifying accounting records that the financial records are prepared from. Misrepresentation is deliberately leaving things such as transactions, events, or other information. Misapplication must be intentional and relates to amounts or classifications.
5. Sunbeam used a bill and hold practice to create revenue. This practice is where the customer agrees to purchases goods and the seller provides the invoice, but still keeps the product for a later delivery date.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture