Horizontal Analysis Can Be Used in Fraud Detection By

question 15

Multiple Choice

Horizontal analysis can be used in fraud detection by:

• A)Checking the trend in earnings from year to year of persons suspected of fraud.
• B)Looking for significant changes in financial statement amounts and ratios across several fiscal periods.
• C)Looking for odd relations of one account to a base such as sales.
• D)Looking for the change in net worth of a suspect from the beginning to the end of a period.

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Definitions:

Class Intervals

The range of values divided into different segments or classes used in the distribution of data for histogram representation.

Observations

Data points or recorded measures of certain variables taken from samples or experimental studies.

Spread

The statistical range, measuring the variability or difference between the upper and lower bounds in a data set.

Histograms

Graphical displays of data that use bars to represent the frequency of numerical data that are separated into intervals, or bins.