Ch3 Verified Test Bank + Legal, Regulatory, and Professional

CHAPTER 3

Module 1

1. (75) One reality of what is known as the criminal justice funnel is:

A. Few cases result in convictions and incarcerations

B. A majority of cases result in convictions and incarcerations

C. Regulatory agencies play an important role in monitoring illegal activities

D. Civil and criminal cases cannot be pursued simultaneously

Module 2

2. (76) Individual rights are grounded in four amendments to the US Constitution associated with due process. Which of the following is not one of these four amendments?

A. The Fourth Amendment prohibits unreasonable searches and seizures

B. The Seventh Amendment which entitles the accused the right to a speedy trial

C. The Fourteenth Amendment entitles a person to due process of law and equal protections under the law

D. The Fifth Amendment provides that a person cannot be compelled to provide incriminating information against himself in a criminal case

3. (76) Regarding interviews conducted by a nonpublic entity and the Sixth Amendment, an employee:

A. Does not have a right to consult a lawyer prior to an interview but has a right to have one present during one

B. Does not have a right to have a lawyer present during an interview but has a right to consult one prior

C. Does not have a right to have a lawyer present or to consult one prior to the interview

D. Has a right to have a lawyer present during an interview and to consult one prior

4. (76) In order for a confession to be valid, it must be deemed to be:

A. Voluntary

B. Coerced

C. Factual

D. Sincere

5. (77) The overriding rule regarding searches and search warrants is that individuals have:

A. A right to not self-incriminate

B. An expectation of absolute privacy within their home or vehicle

C. A reasonable expectation of privacy

D. A right to privacy in the workplace (such as lockers, desks, etc.)

6. (77) A workplace search is considered reasonable under two circumstances: The search must be justified at its inception because it is likely to reveal evidence of work-related misconduct, and:

A. The search is necessary to further the investigation.

B. The search is necessary to satisfy a court order.

C. The search is necessary to preserve public order.

D. The search is necessary to operational efficiency.

7. (77) In the contexts of searches, the expression “fruit from the forbidden tree” means:

A. Any information derived from confidential informants cannot be introduced if the CI has a felony record.

B. Any information from evidence that was in “plain view” of law enforcement cannot be introduced.

C. Any information derived from voluntary consent to search cannot be introduced.

D. Any information derived from illegal evidence cannot be introduced.

8. (78) Surveillance is generally legal, however, once the investigator enters the realm of electronic (audio) surveillance, the laws become more complicated. Generally federal law prevents ________________________:

A. The interception and/or recording of wire, oral, or electronic communications except if it is collected by a certified fraud examiner (CFE) as part of a legitimate investigation.

B. The interception and/or recording of wire, oral, or electronic communications except if it is recorded in a public venue.

C. The interception and/or recording of wire, oral, or electronic communications except by law enforcement officers with a warrant.

D. The interception and/or recording of wire, oral, or electronic communications except if it is evidence of a class B or higher felony investigation.

9. (79) The Daubert standard is related to the admissibility of expert testimony (expert opinions). Under the Daubert standard, the trial judge makes an assessment of whether an expert’s scientific testimony is based on reasoning or methodology that is scientifically valid and can properly be applied to the facts at issue. Which of the following is NOT one of the considerations in determining whether the methodology is valid?

A. Whether the theory or technique in question can be used and has been tested.

B. Whether the theory or technique in question has been verified through a double-blind study that includes a control group.

C. Whether the theory or technique has been subject to peer review and publication.

D. Whether the theory or technique has attracted widespread acceptance within a relevant scientific community.

Module 3

10. (80) While grand juries have great leeway related to issuing subpoenas, the Fourth Amendment requires reasonableness. To meet the reasonableness standard, the subpoena must be likely to generate evidence that is:

A. Relevant to the issue under consideration, be particular and reasonably specific, and be limited to a reasonable time frame.

B. Relevant to the issue under consideration, be particular and reasonably specific, and be limited to class B felony (or higher) investigations.

C. Relevant to the issue under consideration, be particular and reasonably specific, and be based on a higher than average probability that a crime has been committed.

D. Relevant to the issue under consideration, be particular and reasonably specific, and must meet the Daubert standard.

11. (81) A search warrant has several advantages over a subpoena. Which of the following is NOT one of the advantages described in the text?

A. A warrant allows the holder of the warrant, not the target of the defense counsel, to decide which documents are relevant and must be produced.

B. A warrant avoids, but does not eliminate, the possibility of the destruction of evidence.

C. A warrant gives the investigator the ability to interview key witnesses while the search is being conducted.

D. A warrant gives the investigator the ability to seize any unlawful item that may be discovered in the search if it is part of a class B (or higher) felony.

Module 4

12. (81) Generally, evidence is admissible in court if it is relevant, its probative value outweighs any prejudicial effects, and:

A. It is trustworthy, meaning that it is presented by credible witnesses.

B. It is trustworthy, meaning that it is subject to examination and cross-examination.

C. It is trustworthy, meaning that it is fact based rather than opinion.

D. It is trustworthy, meaning that it is neutral in its impact on the jury.

13. (82) Even relevant evidence may be excluded from judicial proceedings if it is prejudicial, confusing, or ____________.

A. Contradictory

B. Material

C. Misleading

D. Inconclusive

14. (82) Prior to admissibility of evidence in court, the attorney must lay the foundation demonstrating relevance, materiality, and ____________ (reliability).

A. Validity

B. Competence

C. Probative value

D. Non-speculative

15. (82) You are testifying in a criminal trial where the CFO of a publicly traded company is accused of embezzling $2.7 million. Which of the following would be considered facts at issue?

A. A Panama Papers leak showing the existence of an offshore shell company account with the CFO listed as the beneficial owner.

B. Whether or not the CFO stole the money.

C. An email from the CFO directing the Head of Accounting to disregard the absence of invoices for purchases of “business consulting services” authorized by the CFO.

D. Documentation of special purpose entities created and controlled by the CFO that do not appear on the company’s balance sheet.

16. (82) Documentary evidence is at the heart of most fraud and forensic accounting investigations. Five considerations must be given to any piece of documentary evidence: The document must not have been forged, original documents are preferred, the document must not be hearsay or objectionable, the document needs to be authenticated, and the document must be _____________.

A. Illustrative (or summative)

B. Probative in value

C. Unbiased

D. Reliable

17. (82) The chain of custody protects against the _____________ of evidence as a result of investigators losing control of it.

A. Shredding

B. Possible corruption

C. Leaking

D. Unauthorized distribution

18. (82) Evidence is anything legally presented at trial to ___________ and convince a jury.

A. Link the facts at issue into a story

B. Explain or demonstrate the facts (such as a PowerPoint presentation)

C. Prove a contention

D. Secure a guilty verdict

19. (82) Evidence may be testimonial, real or demonstrative, or ______________.

A. Circumstantial or direct

B. Probative in value

C. Expert opinion-based (if admissible)

D. Sealed under the Foreign Intelligence Act of 1978

20. (82) Demonstrative evidence may include photographs, charts, diagrams, drawings, scale models, but because it is not real evidence it must not ___________ and it must not materially alter any significant aspect of the facts at issue.

A. Have been outside the chain of custody

B. Be speculative or conjectural

C. Raise doubts in the mind of the jury

D. Create prejudice

21. (82) The best evidence rule allows copies of documents to be presented at trial under:

A. No circumstance whatsoever

B. The rules of admissibility

C. Certain circumstances

D. Oath that the copy has been altered

Modules 5 & 6

22. (84) The primary purpose of a civil action is to:

A. Recover losses and possibly reap punitive damages

B. Redress criminal wrongdoing through incarceration

C. Reduce the case load in criminal courts

D. Restore societal faith in the court system

23. (84) ____________ is the process by which each side may explore the merits of the other side’s arguments by obtaining documentary and testimonial evidence.

A. No lo contendere

B. Cross examination

C. Discovery

D. Cease and desist

24. (86) A civil action requires a _________________ of the evidence, meaning that the evidence stacks up slightly more heavily on one side than the other. This contrasts with the criminal threshold of “____________________.”

A. Preponderance; beyond a reasonable doubt

B. Predication; proof-positive

C. Probative evaluation; facts at issue

D. Proportionality; beyond any reasonable doubt

Module 7

25. (86) Basic (accounting) bookkeeping involves the recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing accounting, financial, and _____________ information for decision making.

A. Nonfinancial

B. Factual

C. Investment

D. Complex

26. (86) In an audit or investigation, the antifraud professional must design _____________ to identify anomalies, investigate those anomalies, form and test hypotheses, and evaluate the evidence generated.

A. Statistical models

B. Algorithms

C. A spreadsheet with conditionally formatted cells

D. Procedures

Module 8

27. (93) An audit is performed to ensure that ___________________________________.

A. Reasonable assurance of SOX compliance can be attained by holders of a company’s stock.

B. The organization is complying with PCAOB, FASB, and AICPA accounting standards.

C. The financial statements are fairly presented and are free from material misstatement.

D. Financial fraud is not occurring within the organization.

28. (93) Professional skepticism entails three overlapping concepts: An attitude that includes a questioning mind and a critical assessment of audit evidence, conducting of the engagement that recognizes the possibility of material misstatement due to fraud, and ____________________ with less-than-persuasive evidence.

A. Tentative acceptance

B. Professional tolerance

C. Dissatisfaction

D. Discarding documents

29. (94) The Sarbanes-Oxley Act of 2002 was signed into law to address corporate governance and accountability as well as public accounting responsibilities in improving the quality, reliability, integrity, and transparency of financial reports. Which of the following is NOT one of the measures the law aimed to accomplish?

A. Establishing higher standards for corporate governance and accountability

B. Creating an independent regulatory framework for the accounting profession

C. Establishing new protections for corporate whistleblowers

D. Diminishing fraud, waste and abuse among 501(c)(3) tax-exempt charities

30. (94) The Sarbanes-Oxley Act of 2002 authorized the SEC to issue implementation rules on many of its provisions intended to improve corporate governance financial reporting, and audit functions. Which of the following was NOT one of the rules summarized in the textbook?

A. New standards of professional conduct for attorneys

B. Certifications of legality by the owners of special purpose entities

C. Disclosures regarding a Code of Ethics for Senior Financial Officers and Audit Committee Financial Experts

D. Conditions for use of non-GAAP financial measures

31. (94) The fundamental purpose of the COSO ERM framework approach is to help entities ensure that they will be able to achieve their operational financial objectives and goals. Which of the following are NOT included in the framework?

A. Achieving high-level strategic goals and the entity’s mission

B. Effective and efficient use of the company’s operational resources

C. Safeguarding of company resources by preventing loss through fraud, theft, waste, inefficiency, bad business decisions, etc.

D. Whether realistic organizational goals and objectives are set

32. (105) The primary role of _________________________ is to protect investors, create long-term shareholder value, ensure investor confidence and support strong and efficient capital markets.

A. Corporate governance

B. Certified Fraud Examiners and CPAs

C. The SEC, PCAOB and COSO ERM Framework

D. Wall Street analysts