Which of the Following Statements Is False Regarding Forensic Accounting

question 47

Multiple Choice

Which of the following statements is false regarding forensic accounting?

• A) Forensic accounting builds support for legal action against the person committing the fraud by identifying the fraud, calculating the damages caused by the fraud, and building both factual and testimonial evidence of the fraud.
• B) Forensic accountants rely on sampling of fraud-related documents to accurately measure the cost of the fraud.
• C) One aspect of forensic accounting focuses on identifying the person who has perpetrated the fraud and having that person confess to the fraud.
• D) Interviewing is one of the most important forensic accounting skills.

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Definitions:

Hurdle Rate

Hurdle Rate is the minimum acceptable return on investment or project that a business requires before it considers it viable or proceeds with it.

Accounting Rate of Return

The return on an investment calculated by dividing the average annual profit by the initial investment cost, typically used to assess the profitability of potential investments.

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the strategy and financial performance of an organization.