CA CA Forensic Accounting & Fraud Detection 2

Question 1

Which analytical technique is commonly used in forensic accounting to identify unusual numeric patterns that may indicate fraud?

Accepted Answer

Benford's Law analysis

Answer

Benford's Law predicts the expected frequency distribution of leading digits in naturally occurring data and deviations from this pattern can signal fraudulent manipulation.

Question 2

What is a 'ghost employee' scheme?

Accepted Answer

Adding fictitious employees to the payroll to collect their wages

Answer

A ghost employee scheme involves creating fictitious workers on the payroll so the fraudster can collect and divert their paychecks.

Question 3

In a forensic investigation, what does 'chain of custody' refer to?

Accepted Answer

The chronological documentation tracking the handling and transfer of evidence

Answer

Chain of custody is the unbroken documentation showing the seizure, custody, control, transfer, and analysis of evidence, which is critical for admissibility in court.

Question 4

Which type of occupational fraud involves an employee creating fictitious vendors and submitting fraudulent invoices for payment?

Accepted Answer

Billing scheme

Answer

A billing scheme involves submitting false invoices from fictitious or shell companies to steal funds through the accounts payable process.

Question 5

What does 'money laundering' involve?

Accepted Answer

Concealing the origins of illegally obtained money to make it appear legitimate

Answer

Money laundering is the process of making illegally obtained proceeds appear to come from legitimate sources through a series of financial transactions.

(CA) Chartered Certified Accountant Practice Test

(CA) Chartered Certified Accountant Practice Test

CA CA Forensic Accounting & Fraud Detection 2