Forensic Accounting & Fraud Flashcards
7 cards from real CFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Forensic Accounting & Fraud flashcards as text
Which analytical procedure would best detect fictitious employees on a payroll?
Answer: Matching employee Social Security numbers against the Social Security Death Index
Matching SSNs against the Death Index reveals ghost employees whose identities are based on deceased individuals, a common payroll fraud technique.
In an accounts payable fraud investigation, the auditor finds multiple vendors sharing the same P.O. Box address. This is most indicative of:
Answer: A shell company or fictitious vendor scheme
Multiple vendors sharing a P.O. Box is a classic red flag for shell companies created by insiders to submit fictitious invoices and divert company funds.
The 'three-way match' internal control in accounts payable compares which three documents?
Answer: Purchase order, receiving report, and vendor invoice
Three-way matching verifies that the purchase order, receiving report, and vendor invoice all agree before approving payment, detecting unauthorized purchases.
Which phase of the money laundering process involves disguising the source of illicit funds by moving them through complex transactions?
Answer: Layering
Layering involves creating a complex trail of financial transactions to obscure the audit trail and distance the funds from their illegal origin.
A forensic accountant reviewing a company's journal entries notices numerous round-number manual entries posted just below the approval threshold late on Friday afternoons. This pattern suggests:
Answer: Structuring to avoid management review controls
Entries consistently just below authorization thresholds on low-oversight days suggest deliberate structuring to circumvent management approval controls.
Under the Foreign Corrupt Practices Act (FCPA), which of the following payments to a foreign official is explicitly permitted?
Answer: Facilitating payments to expedite routine government actions
The FCPA contains a narrow exception for facilitating payments (grease payments) made to expedite routine, non-discretionary government actions such as customs clearance.
Which element distinguishes embezzlement from ordinary theft under the law?
Answer: The perpetrator's lawful possession of property before converting it
Embezzlement requires that the perpetrator initially had lawful possession or custody of the property before converting it to personal use, unlike theft where possession is never authorized.