2. Fraud Theory and Detection

Detection Techniques — Quiz

Test your understanding of detection techniques with 5 practice questions.

Practice Questions

Question 1

A forensic accountant is analyzing a company's financial statements and notices that the accounts receivable balance has been consistently growing at a rate significantly higher than sales revenue over the past three years. Which of the following detection techniques would most effectively highlight this discrepancy?

Question 2

When investigating potential vendor fraud, a forensic accountant uses a data analysis technique to identify vendors with multiple addresses, bank accounts, or tax identification numbers. Which specific data analysis technique is being employed?

Question 3

A forensic accountant is reviewing a company's inventory records. They observe that the 'cost of goods sold' has remained relatively constant, but the 'ending inventory' balance has significantly decreased over the last two quarters, despite stable purchasing levels. Which ratio analysis technique would most effectively flag this inconsistency?

Question 4

In a scenario where a company's sales commission expenses show an unusually high correlation with the last day of each reporting period, but not with actual sales volume throughout the period, which data analysis technique would be most effective in identifying this pattern?

Question 5

A forensic accountant is investigating a company's expense reimbursement system. They notice a high volume of expense claims from different employees for identical services (e.g., 'consulting fees') from the same vendor, all for amounts just below the threshold requiring management approval. Which detection technique is being applied?