2023
MCQ
BASIC CONCEPTS OF FORENSIC ACCOUNTING
AND FRAUD DETECTION
If your actions are the result of misleading,
intentional actions or inactions to gain an
advantage, then you have committed a ……….
A. Perjury
B. Contempt
C. Treason
D. Fraud
Answer key : D
2023
…………………….. is / are the elements of fraud
A. The individual must know that the statement is
untrue.
B. There is an intent to deceive the victim
C. The victim relied on the statement and the victim
is injured financially or otherwise.
D. All of the above
Answer key: D
An act of unintentional mistake is known as
………….
A. Fraud
B. Deception
C. Error
D. Forgery
Answer key : C
2023
While collar crimes are the ones which
damage the organization ………….
A. Many times
B. Many times and in huge amounts
C. Less times
D. Less times but in huge amounts
Answer key : D
The most cost effective way to minimize the
cost of fraud is …………
A. Prevention
B. Detection
C. Investigation
D. Prosecution
Answer key: A
2023
Auditor’s responsibility relating to fraud in
financial statements is covered in ………….
A. SA 200
B. SA 240
C. SA 250
D. SA 299
Answer key: B
Pressure, Opportunity and ……………… are the
aspects of a Fraud Triangle
A. Rationalization
B. Capability
C. Integrity
D. Commitment
Answer key : A
2023
Employee’s behavior changes ( addiction to
alcohol, gambling etc) will come under which
component of Fraud Triangle
A. Opportunity
B. Pressure
C. Rationalization
D. Capability
Answer key: B
When the fraudster is able to give a personal
justification for his dishonest actions, it is known
as ………..
A. Pressure
B. Opportunity
C. Rationalization
D. All of the above
Answer key : C
2023
Weak internal controls in an organization will
affect which of the following elements of fraud
A. Pressure
B. Opportunity
C. Rationalization
D. All of the above
Answer key: B
Excessive competition in the marker leads to
………….
A. Pressure
B. Opportunity
C. Rationalization
D. Capabilty
Answer key: A
2023
Lack of rotation of duties will come under
………………….. component of a Fraud Triangle
A. Pressure
B. Opportunity
C. Rationalization
D. Capability
Answer key: B
If pressure and opportunities are high and
personal integrity is low, the chance of fraud is
…………
A. High
B. Medium
C. Low
D. Can’t say
Answer key: A
2023
A model categorizing known frauds which lists
about 49 different individual fraud schemes
grouped by categories and subcategories is known
as ………
A. Fraud Triangle
B. Fraud Diamond
C. Fraud Scale
D. Fraud Tree
Answer key : D
Which of the following crimes targets a
computer
A. Money laundering
B. Denial of Service
C. Intellectual property violations
D. Theft of Services
Answer key: B
2023
A type of fraud where forged emails, forged
website are used to defraud the user
A. Hacking
B. Forgery
C. Phishing
D. Skimming
Answer key: C
Fraudsters may alter the cheques to change the
name or the amount on the face of cheque. This is
a …………
A. Phishing
B. Forgery
C. Disbursement Fraud
D. Skimming
Answer key : B
2023
Why do people commit Financial Statement
Fraud
A. To conceal true business performance
B. To preserve personal status / control
C. To maintain personal income / wealth
D. All of the above
Answer key: D
Financial Statement Fraud is easiest to
commit in organization that ……………….
A. Have democratic leadership
B. Have a large internal audit department
C. Have a Board of Directors comprised primarily of
outsiders
D. Have complex organizational structures
Answer key: D
2023
A …………….. is termed as an indication of a
danger or a warning signal.
A. Yellow Flag
B. Red Flag
C. Green Flag
D. White Flag
Answer key : B
A …………… is a flag which denotes a “too
good to be true scenario”
A. Yellow Flag
B. Red Flag
C. Green Flag
D. White Flag
Answer key: C
2023
A significant increase in working capital borrowing
as a percentage of turnover is a …………..
A. Yellow Flag
B. Red Flag
C. Green Flag
D. White Flag
Answer key: B
The case where an employee does not take travel
advance but always pays from his pocket is an
example of …………..
A. Yellow Flag
B. Red Flag
C. Green Flag
D. White Flag
Answer key: C
2023
Excessive related party transactions are
considered as ………………
A. Red Flag
B. Green Flag
C. Yellow Flag
D. White Flag
Answer key: A
The purpose of the Red Flags is to ……….
A. Detect the warning signs in the day to day
operations
B. Take steps to prevent the crime
C. Mitigate the damage it inflicts
D. All of the above
Answer key : D
2023
Forensic Accounting is defined as :
A. The practice of applying defined financial ratios to
investigate a company’s financial health.
B. The use of law enforcement to summons financial records
to determine unlawful actions.
C. The application of investigative and analytical skills for the
purpose of resolving financial issues in a manner that
meets stndards required by the court of law.
D. The investigatory arm of the Securities and Exchange
Commission
Answer Key : C
27
Which of the following types of organizations
typically use forensic accountants
A. Publicly held corporations
B. Private / Non-profit Corporations
C. Federal / State Agencies
D. All of the above
Answer key: D
2023
Good traits of a Forensic Auditor is / are
…………….
A. Maintaining professional skepticism
B. Being a good observer
C. Using multiple clues to analyze any area
D. All of the above
Answer key: D
Denominator in RSF Test is …………
A. Number of records in subsets
B. Largest record insubset
C. Second largest record in subset
D. Smallest record in subset
Answer key: C
2023
Based on the Beford’s Law, which of the following
House Number is likely in the list of addresses in
the City Directory
A. 432
B. 123
C. 243
D. 312
Answer key: B
