# Forensic Accounting

Submitted By rachel418428
Words 5213
Pages 21
Final Review for ACCT 436
M/C题：
1. Racketeer Influenced and Corrupt Organization (RICO)
-Act that lists more than 30 different state and federal crimes for which the violation of any two in a related pattern over a 10-year period can lead to criminal and/or civil liability with criminal penalties of fines up to \$25,000 and 20 years in prison; part of the Organized Crime Control Act (OCCA) of 1970.
-The act was designed to combat organized crime, forbids certain organized gambling, and to allow the prosecution of criminal leaders who may not have been directly involved in a series of criminal acts but whose criminal organization carried out the details.

2. Benford’s Law
(1)定义：A fraud indicator that predicts the relative incidence of first digits of numbers in certain types of random data.
(2)Benford Analysis
Benford analysis presents another interesting approach to fraud detection. Its general use is to determine the likelihood that fraud exists in records. This technique is based on Benford’s law, named after Frank Benford who realized that the likelihood that numbers 1, 2, 3, 4, 5, 6, 7, 8, and 9 will appear as the first digit in numbers occurring in a random data set conforms to a predictable pattern. That is, the number 1 is more likely to appear as the first digit in a number than is the number 2. The pattern of likelihood (Figure 6.6) continues with other digits: The number 2 is more likely to appear as a first digit than 3, 3 is more likely to appear as a first digit than 4, and so on. Note that just because the likelihood is higher that 7 will appear as a first digit than will 8 does not mean that a number that begins with 8 is due to fraud. Benford’s law can be used to determine whether a higher risk than normal exists that a population of numbers—for example, a collection of vendor’s invoices—contain fraud. Specifically, the invoice amounts can be…...

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