Question

AICPA Practice Ald 07-1 describes seven forensic Investigative techniques and compares and contrasts them with similar evidence gathering activities of auditors. These seven are public document reviews and background Investigations, Interviews of knowledgeable persons, confidential sources of information and evidence, laboratory analysis of physical and electronic evidence, physical and electronic surveillance, undercover operations, and A commitment to nothing less than persuasive evidence Development and analysis of competing hypotheses (eg, use of an HE Matrix or similar tool) Graphical display tools such as link charts, flow diagrams, and timelines Analysis of financial transactions, financial performance, financial condition and relevant non-financial evidence

Answer 1

The correct answer is "D" : Analysis of financial transactions, financial performance, financial condition and relevant non-financial evidence.

Fraud examiners rely heavily on their analysis of the financial statements, the numeric data present therein alongwith their analysis on the presentation and related accounts balances. Hence analysis of financial transactions, financial performance, financial condition and relevant non-financial evidence forms an important forensic investigative technique.