If Skimming Has Been in Practice for Years in a Business

question 27

Multiple Choice

If skimming has been in practice for years in a business, why might it be hard to detect using horizontal analysis?

• A) Comparing a year in which receipts have been skimmed to other years in which. receipts have been skimmed will usually not reveal differences.
• B) Horizontal analysis is typically performed in industries that have high skimming rates.
• C) Gross margins for the industry typically won't reveal any fraud when evaluated via Horizontal analysis.
• D) Skimming typically is revealed on the income statement and horizontal analysis is only done on balance sheet accounts.

---

Definitions:

Hershey

This could refer to Alfred Hershey, a bacteriologist known for the Hershey-Chase experiment which helped to confirm that DNA is the genetic material.

Chase

In molecular biology, refers to the follow-up procedure in a pulse-chase experiment, where the presence and movement of a molecule or compound is tracked over time after initial labeling.

Nucleotides

The basic building blocks of nucleic acids, such as DNA and RNA, consisting of a sugar, a phosphate group, and a nitrogenous base.

Information Storage

The retention of digital or analog information over time for the purpose of retrieval and use in the future.