Deck 3: Screening and Staging Engagements

Question 1

Which of the following can help in identifying a potential conflict of interest?

A) reviewing the subject complaint
B) engaging the services of a detective
C) assessment of the jury
D) statements made by the attorney and expert

Answer 1

A

Question 2

Which of the following is true of the deadlines of a forensic accounting engagement?

A) The deadlines for an engagement are decided by the engaging client, after consulting with the forensic accountant.
B) The deadlines for an engagement are flexible and can be altered to meet the requirements of the expert.
C) Missing a report deadline can result in serious consequences, including court sanctions and damage to one's reputation.
D) Missed deadlines can be easily extended by filing a request for an extension with the court.

Answer 2

C

Question 3

Which of the following is true in when a conflict of interest exists in an engagement?

A) A potential conflict of interest need not be disclosed if it does not affect the independence of the forensic accountant.
B) A verbal consent is sufficient to acknowledge the potential conflict and waive any objections related thereto in the presence of a judge.
C) An engagement in which a potential conflict has been identified can be accepted if the conflict does not impair the objectivity of the forensic accountant to a large extent.
D) If a potential conflict of interest is identified, it must be fully disclosed to the client before the engagement is accepted.

Answer 3

D

Question 4

An engagement letter for providing litigation services is required under the AICPA's professional standards.

Question 5

Dimitriv,a forensic accountant,is hired by the court to provide additional insight into the ongoing trial against Blue Rock,Inc.Dimitriv holds a large share of Blue Rock's stock.Which of the following can be inferred of this case?

A) an engagement letter is not necessary
B) lack of professional competence
C) conflict of interest exists
D) nature of engagement is unclear

Question 6

Media is an example of primary sources of information considered by forensic accountants.

Question 7

Which of the following is a reason for rejecting an engagement in which conflicts of interest has been identified?

A) It leads to disagreements between an attorney and an expert.
B) It impairs independence and objectivity of the forensic accountant.
C) It results in disclosure of confidential or sensitive information.
D) It undermines the attorney-client privilege.

Question 8

The determination of the risk-reward ratio of an engagement is similar among practitioners.

Question 9

Under no circumstances can an expert witness provide services under a contingent fee.

Question 10

Different jurisdictions often have different laws and use different rules of procedure.

Question 11

A Kovel letter should confirm that the expert is being retained to assist the attorney in providing legal services.

Question 12

Which of the following is considered to be a safe compensation arrangement for a forensic accountant?

A) a lump sum amount
B) a commission based on the success of the engagement
C) an advance payment for the full amount
D) an hourly fee with a retainer

Question 13

Which of the following does a conflict of interest generally indicate?

A) The objectivity of the forensic accountant is likely to be impaired.
B) The testimony of the expert will have an adverse impact on the case presented by the attorney.
C) The outcome of the trial will be adverse to the interest of the client.
D) The attorney-client privilege will cease to be in force for the remaining period of the trial.

Question 14

The requisite standard of proof is determined by the type of case.

Question 15

When engaged as a testifying expert rather than consulting expert,the expert is not considered an agent of the attorney.

Question 16

Which of the following statements is true of the engaging attorney?

A) The basic purpose of attorneys is to advocate for their clients.
B) Attorneys are generally unwilling to sacrifice the expert's reputation even at the cost of client.
C) It is not possible to distinguish a bad attorney from a good one.
D) Keeping the expert in the loop is a sign of a red flag that the attorney might be bad.

Question 17

Which of the following is true of engagement letters?

A) Engagement letters can be modified with the approval by both parties.
B) Engagement letters are generally addressed to the expert to establish the expert's relationship as the attorney's agent.
C) Engagement letters are treated as privileged communication and need not be disclosed to the court.
D) Engagement letters for providing litigation services are required under the AICPA's professional standards.

Question 18

A hypothesis is a statement of fact.

Question 19

Which of the following is true of a joint expert?

A) A joint expert's opinion is considered more subjective.
B) Hiring a joint expert increases fees and the time.
C) Hiring a joint expert is most common in domestic litigation.
D) The chances of conflict of interest increases when a joint expert is hired.

Question 20

Drawing conclusions requires a mix of both deductive and inductive reasoning.

Question 21

Which of the following is true of the last step of the scientific process?

A) It requires the use of inductive and deductive reasoning to arrive at conclusions.
B) It involves an objective evaluation of all evidence collected in a case followed by an estimation of the probability that the hypothesis is valid.
C) It involves use of techniques such as financial statements analysis.
D) It requires the forensic accountant to form a working hypothesis.

Question 22

Which of the following is a difference between primary research and secondary research?

A) Primary research relates more generally to the subject matter of the research question or problem, whereas secondary research is engagement-specific.
B) Primary research involves the collection, analysis, and interpretation of original data, whereas secondary research involves the collection, analysis, and interpretation of data that has been compiled and published by others.
C) Primary research is done by the engaging attorney or client, whereas secondary research is done by the forensic accountant or the expert engaged.
D) Primary research is commonly used in refining a hypothesis, developing critical assumptions, and selecting methodologies, whereas secondary research is commonly used in forming a hypothesis and gathering evidence.

Question 23

Which of the following is generally considered to be the most difficult task in the scientific process?

A) defining the purpose
B) forming a hypothesis
C) gathering evidence
D) drawing conclusions

Question 24

Which of the following is a reason why relevant dates should be determined while framing a case?

A) It determines the assumptions to be made.
B) It affects the evidence-gathering process.
C) It defines the time to be taken to complete the engagement.
D) It acts as a scope limitation.

Question 25

Which of the following is a characteristic of a good research?

A) It does not require a working hypothesis as it is tentative in nature.
B) It is mostly using the Internet sources as they are cheaper and easier to access.
C) It is guided by the specific problem and a working hypothesis.
D) It does not accept assumption and is based purely on facts.

Question 26

Which of the following is the last step of the five step scientific process?

A) interpreting data
B) drawing conclusions
C) refining the hypothesis
D) preparing a report

Question 27

Which of the following is true of jurisdiction in terms of a forensic accounting engagement?

A) It does not impact the manner in which evidence is presented.
B) Practitioners need not address any jurisdictional issues with engaging counsel.
C) It is the domain over which a court exercises judicial authority.
D) It is not a factor that is considered by a forensic accountant while framing a case.

Question 28

When performing an engagement,which of the following professional standards should be adhered to?

A) development standards, which address the development of the expert's opinion
B) research standards, which address the process to be followed while conducting a research
C) scientific standards, which address the schedule of the scientific approach
D) engagement standards, which address the issues to be considered while accepting an engagement

Question 29

Which of the following is a common evidence-gathering technique used by forensic accountants?

A) benchmarking
B) crime scene analysis
C) sampling
D) inspection

Question 30

Which of the following best defines a hypothesis in a scientific process?

A) derivation of a conclusion based on observations
B) development of a tentative explanation based on preliminary observations
C) collection of data for the engagement
D) a statement of the exact function an accountant has been engaged to do

Question 31

Which of the following is true of an engagement letter?

A) It is addressed to the expert, to establish an agent relationship.
B) It cannot be amended once signed by both parties.
C) It is a necessary requirement for litigation services as per the AICPA's professional standards.
D) It establishes the nature of an engagement and any protections attached therewith.

Question 32

Which of the following is the basic purpose of gathering evidence?

A) to determine the objective of the engagement
B) to form a working hypothesis
C) to draw a conclusion from the scientific process
D) to test the validity of the hypothesis

Question 33

Which of the following should be followed by the forensic accountant while evaluating evidence?

A) The working hypothesis must be constantly re-evaluated and refined based on new evidence.
B) For most engagements, the concept of probability should be considered specifically.
C) Evidence can be accepted at face value if it has been obtained from a known source.
D) The negative facts, inconsistencies, or discrepancies that challenge his or her working hypothesis can be ignored.

Question 34

Which of the following is a special benefit of the scientific approach?

A) It eliminates the requirement of gathering evidence through primary research.
B) It provides a platform for conducting extensive research.
C) It helps in reducing the number of steps that needs to be performed in an engagement.
D) It decreases liability by reducing the potential for missed steps.

Question 35

When evaluating evidence,the forensic accountant should make an effort to document and date all items considered.Which of the following statements is true of this data log?

A) It should include speculations, in addition to facts and direct observations.
B) It helps keep the process on track and avoid duplication of efforts.
C) It cannot be used by the opposing counsel to challenge the expert witness.
D) It serves as evidence by itself.

Question 36

Joseph Smith,a forensic accountant,is considering whether to accept an engagement or not.From the preliminary information of the case,he is not able to identify a specific conflict of interest.However,he realizes that there is a chance that the engagement might create the perception of a conflict of interest in the professional community.Joseph should

A) accept the engagement as there is not real conflict of interest.
B) not accept the engagement because law does not allow acceptance of such engagements.
C) accept the engagement because perception of conflict is not likely to affect him.
D) not accept the engagement as perception of a conflict could erode his credibility.

Question 37

Which of the following is generally covered in an engagement letter?

A) research plan
B) deadlines given by the court
C) evidence required to be gathered
D) right to terminate

Question 38

Framing a case refers to

A) the identification of all critical aspects of a case.
B) an economic assessment of an engagement's risks and rewards.
C) the development of the engagement letter.
D) the identification of responsible parties.

Question 39

Which of the following is a step in the scientific process?

A) re-statement of the purpose specified in the engagement letter
B) identify the conflict of interest
C) form a hypothesis
D) testify under oath

Question 40

Which of the following is a key function of a research plan?

A) to specifically identify the data to be collected and analyzed
B) to set a schedule for the research process
C) to ensure that only data that support the hypothesis is collected and analyzed
D) to assist in drawing conclusions from the hypothesis

Question 41

Which of the following is true of secondary research?

A) It is engagement-specific and involves the collection, analysis, and interpretation of original data.
B) It is commonly used by forensic accountants in refining a hypothesis, developing critical assumptions, and selecting methodologies.
C) It is comparatively more data-intensive, time-consuming, and expensive as compared to primary research.
D) Sources of secondary information include bank data, communications data, and organizational data.

Question 42

Which of the following is an example of secondary sources of information?

A) Ben collected data from bank statements and loan documents to support her testimony on the banking fraud case.
B) Wendy interviewed the employees of Bourghen, Inc. to know the accounting procedure followed by the company.
C) Olive referred to similar court cases that had been published to understand the take of the jury and the law on certain issues.
D) Liam analyzed the financial statements and tax returns of Grow Healthy, Inc. to obtain data for forming a working hypothesis.

Question 43

Which of the following is an example of primary sources of information?

A) published statistics
B) media
C) management reports
D) asset protection data

Question 44

Which of the following is a reason why research is considered valuable to forensic accountants?

A) It enhances critical thinking and reasoning skills.
B) It eliminates the requirement of a working hypothesis.
C) It helps in avoiding the evidences against the hypothesis.
D) It increases the mistakes, but results in better decisions.

Question 45

What are the specific benefits of a scientific approach?

Question 46

Why should any potential conflicts of interest be identified before accepting an engagement?

Question 47

Which of the following is a reason why online research requires exercise of caution and skepticism?

A) The information is available to all and confidentiality of information cannot be maintained.
B) Some states do not accept the conclusions formed on the basis of information collected through online research.
C) The Internet has unpublished content which does not serve any purpose to forensic accountants.
D) The Internet contains misleading information, which is inconsistent with the Daubert standard.

Question 48

Online research is a double-edged sword.Explain why.

Question 49

Write a short note on scope limitations while framing a case.

Question 50

What are the general contents of an engagement letter?