CFC Forensic Accounting & Fraud 4

Question 1

Which analytical procedure would best detect fictitious employees on a payroll?

Accepted Answer

Matching employee Social Security numbers against the Social Security Death Index

Answer

Matching SSNs against the Death Index reveals ghost employees whose identities are based on deceased individuals, a common payroll fraud technique.

Question 2

In an accounts payable fraud investigation, the auditor finds multiple vendors sharing the same P.O. Box address. This is most indicative of:

Accepted Answer

A shell company or fictitious vendor scheme

Answer

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.

Question 3

The 'three-way match' internal control in accounts payable compares which three documents?

Accepted Answer

Purchase order, receiving report, and vendor invoice

Answer

Three-way matching verifies that the purchase order, receiving report, and vendor invoice all agree before approving payment, detecting unauthorized purchases.

Question 4

Which phase of the money laundering process involves disguising the source of illicit funds by moving them through complex transactions?

Accepted Answer

Layering

Answer

Layering involves creating a complex trail of financial transactions to obscure the audit trail and distance the funds from their illegal origin.

Question 5

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:

Accepted Answer

Structuring to avoid management review controls

Answer

Entries consistently just below authorization thresholds on low-oversight days suggest deliberate structuring to circumvent management approval controls.

(CFC) Certified Forensic Consultant Practice Test

(CFC) Certified Forensic Consultant Practice Test

CFC Forensic Accounting & Fraud 4