Practice Quiz

Forensic Accounting

Category - Specialized Forensic Knowledge

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Which of the following can be a precursor to financial statement investigations?
  1. False financial statements
  2. Bankruptcy
  3. Misplacement of tangible assets
  4. None of the above
  5. All of the above
Explanation
Answer: E - False financial statements, bankruptcy, and misplacement of tangible assets are indicators of potential financial statement investigations. False financial statements indicate that there may have been fraudulent financial reporting. Bankruptcy and misplacement of tangible assets may indicate fraud, which should trigger financial statement investigations.
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