Forensic Accounting Can Be Defined as ________

question 44

Multiple Choice

Forensic accounting can be defined as ________.

• A)investigating possible fraud
• B)designing internal controls and other corporate governance mechanisms
• C)calculating estimates used in financial reports
• D)applying accounting and auditing skills in an action under civil or criminal law

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Definitions:

Solvency

The ability of an entity to meet its long-term financial commitments and debts as they come due.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Profitability

A measure of the efficiency and success of a business in generating profits from its operations over a period of time.

Horizontal Analysis

A financial analysis technique that examines the changes in the amounts of specific financial statement items over a period of time.