CA CA Forensic Accounting & Fraud Detection

Question 1

What is the primary purpose of forensic accounting?

Accepted Answer

To investigate financial fraud and disputes for legal proceedings

Answer

Forensic accounting combines accounting, auditing, and investigative skills to examine financial records for use in legal proceedings.

Question 2

Which fraud scheme involves recording fictitious revenues to inflate a company's financial results?

Accepted Answer

Financial statement fraud

Answer

Financial statement fraud involves deliberately misrepresenting financial results, including recording fictitious revenues to deceive investors or creditors.

Question 3

The 'fraud triangle' consists of pressure, opportunity, and which third element?

Accepted Answer

Rationalization

Answer

The fraud triangle model identifies three factors that contribute to fraud: pressure (incentive), opportunity, and rationalization (the perpetrator's justification).

Question 4

What is 'skimming' in the context of occupational fraud?

Accepted Answer

Taking cash before it is recorded in the accounting system

Answer

Skimming is an off-books fraud scheme where cash is stolen before it is entered into the accounting records, making it difficult to detect.

Question 5

Which document is most commonly used by forensic accountants to trace the full history of financial transactions?

Accepted Answer

General ledger

Answer

The general ledger contains a record of every financial transaction and is the primary source document forensic investigators use to trace fraud.

(CA) Chartered Certified Accountant Practice Test

(CA) Chartered Certified Accountant Practice Test

CA CA Forensic Accounting & Fraud Detection