Question Details

ACCT 345 Chapter 9 Conversion Investigation Methods PART 3

41.	Why is the net worth method advantageous?
a.	It is conservative
b.	It can be used in court
c.	It can help calculate all amounts embezzled
d.	Both A and B



	42.	Which of the following would provide the best information regarding the FBI?
a.	The Bureau of Prisons
b.	The Department of Justice
c.	The Department of Vital Statistics
d.	The Attorney General



	43.	True or false: A net worth calculation usually yields a conservative estimate of stolen funds that is readily accepted as evidence in court.
a.	True
b.	False



	44.	Under the "Net Worth Method", a person who has an increase in net worth of $100,000, known income of $80,000, and a salary of $60,000, would have unknown income of
a.	$0
b.	$10,000
c.	$20,000
d.	$40,000



	45.	The Gramm-Leach Bliley Act allows all of the following except:
a.	Banks to sell customer information
b.	Individuals to gather information under false pretenses.
c.	Companies to share customer information even if the customer has "opted out".
d.	Financial Institutions to share personal information with law enforcement agencies



	46.	Which of the following is an example of a state source of information?
a.	Social Security Administration.
b.	Utility records.
c.	Department of Motor Vehicles.
d.	Permit departments.



	47.	The Bureau of Prisons records are available under
a.	Federal sources of information
b.	State sources of information
c.	Both of the above
d.	None of the above



	48.	Which of the following government agencies does not typically use the net worth method to detect fraud?
a.	Internal Revenue Service
b.	Federal Bureau of Investigation
c.	Social Security Administration
d.	Drug Enforcement Agency



	49.	When investigating conversion the ‘financial footprints’ that fraud investigators are looking for are?
a.	Purchase of assets
b.	Changes in lifestyles
c.	Changes in net worth
d.	All of the above



	50.	The Net-Worth Method:
a.	Is a conservative method and is, therefore, typically accepted as evidence in court
b.	Is used in every fraud case
c.	Is useful evidence for court but does not help in the interrogation process.
d.	Both a and b
e.	Both a and c



	51.	Which of the following is a true disadvantage of using the net worth method?
a.	the amounts are not readily accepted as evidence by courts
b.	it rarely facilitates the obtaining of a confession
c.	it is widely used by the DEA, FBI, and IRS
d.	embezzlers typically spend their money on luxuries that are difficult to track



	52.	Which of the following is the correct method of applying the net worth method
a.	Assets - liabilities - prior year- net worth - living expenses + funds from known sources = Funds from Unknown sources
b.	Assets - Liabilities + prior year- net worth + living expenses - funds from known sources = Funds from Unknown sources
c.	Assets - liabilities - prior year- net worth + living expenses - funds from known sources = Funds from Unknown sources
d.	Net Worth - prior year- net worth + Assets + living expenses - funds from known sources = Funds from Unknown sources



	53.	Which of the following frauds would conversion investigation methods be most effective in uncovering?
a.	Kickback schemes
b.	Revenue fraud schemes
c.	Underrecording of accounts payable
d.	Payroll schemes



	54.	Which of the following statements are true:
             I.	The amounts determined to be stolen using the net worth method are            usually readily accepted as evidence by courts.
            II.        Net worth calculations tend to give a conservative estimate of stolen                 funds.
a.	I only
b.	II only
c.	Both I and II
d.	Neither I or II



	55.	The net worth method for determining amounts embezzled is not regularly used by:
a.	The Federal Executive Board
b.	The Drug Enforcement Administration
c.	The Federal Bureau of Investigation
d.	The Internal Revenue Service



	56.	Why do most fraud perpetrators initiate fraudulent activity?

a.	To increase their savings account
b.	To meet a perceived critical need
c.	To improve their lifestyle
d.	All of the above


	57.	Because the use of ________ is so common in frauds, the ¬¬¬¬_________ can be a fraud investigators most important ally.

a.	mail, Postal Service
b.	tax returns, Internal Revenue Service
c.	narcotics, Drug Enforcement Administration
d.	fake social security numbers, Social Security Administration


	58.	The ¬¬¬__________ is a database that contains arrest and criminal records on a nationwide basis.
a.	National Crime Information Center
b.	Interstate Identification Index
c.	National Prison Bureau Database
d.	None of the above


	59.	The Secret Service performs all of the following functions except:
a.	Protects the president of the United States
b.	Investigates counterfeiting
c.	Investigates theft of government checks
d.	Investigates charges of treason
e.	The Secret Service performs all of the above functions


	60.	UCC records can identify all of the following except:
a.	Collateral on purchased assets
b.	The nature of the lending company
c.	Where a person banks
d.	Whether a person has a need for money
e.	UCC records cann identify all of the above


	61.	A fraud investigator would have the least amount of difficulty obtaining the _________ of a suspect.
a.	Tax returns
b.	Military records
c.	Birth records
d.	Social security number