Why Would a Forensic Accountant Want to Investigate Prior W-2's

question 1

Multiple Choice

Why would a forensic accountant want to investigate prior W-2's during a bankruptcy or divorce fraud investigation?

• A) It may show investment income from investments not previously disclosed.
• B) It may show the purchase of assets through a business that has been written off for depreciation.
• C) It could show contributions to Keogh plans.
• D) It could show contributions to 401K, 403(b) and other deferred compensation plans.

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Definitions:

Forward Contract

A tailor-made deal between two participants to transfer an asset at a fixed price on a specified future date.

Net Method

An accounting method that records the net of discounts or expenses directly on invoices at the time of purchase or sale.

Selling Price

The price at which a product or service is sold to customers, reflecting the cost plus any added profit margin.

Acquisition Differential

This refers to the difference between the purchase price of a company and the fair value of its identifiable net assets.