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Forensic Accounting (Rufus)
Chapter 2 The Legal Environment of Forensic Accounting
2.1 True/False Questions
1) In criminal cases, sanctions generally involve compensation for loss or wrongs suffered.
Answer: FALSE
Explanation: In civil cases, sanctions generally involve compensation for loss or wrongs
suffered (for example, economic damages).
Diff: 1
LO: 2-1
AACSB: Analytical Thinking
2) Personal justice is justice concerned with the private affairs of citizens and their respective
rights.
Answer: FALSE
Explanation: Justice concerned with the private affairs of citizens and their respective rights is
known as civil justice.
Diff: 1
LO: 2-1
AACSB: Analytical Thinking
3) Tax evasion, health care frauds, and bank frauds are covered under civil laws.
Answer: FALSE
Explanation: Tax evasion, health care frauds, and bank frauds are covered under criminal laws.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
4) In the case of a jury trial, the trial stage begins with the selection of a jury.
Answer: TRUE
Explanation: The trial stage begins with the selection of a jury.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
5) The burden of proof is the obligation of the defendant to prove his or her innocence.
Answer: FALSE
Explanation: The burden of proof is the obligation of the plaintiff or prosecution to prove
liability (in a civil case) or guilt (in a criminal case). The defendant is not required to prove his or
her innocence-it is presumed.
Diff: 1
LO: 2-3
AACSB: Analytical Thinking
2
6) Mediation is a “mini trial” wherein each party presents its case to one or more mediators, who
render a binding decision that generally cannot be appealed.
Answer: FALSE
Explanation: Mediation is a non-binding informal process wherein a mediator (mutually selected
by the parties) evaluates the arguments of both sides and helps the parties reach common ground.
Diff: 1
LO: 2-3
AACSB: Analytical Thinking
7) An expert’s testimony is more credible than that of other witnesses.
Answer: TRUE
Explanation: A higher level of credibility is generally attached to an expert’s testimony.
Diff: 1
LO: 2-4
AACSB: Analytical Thinking
8) The trial judge is challenged to carefully qualify the expert but not the testimony of the expert.
Answer: FALSE
Explanation: The trial judge is challenged to carefully qualify both the expert and his or her
testimony.
Diff: 1
LO: 2-4
AACSB: Analytical Thinking
9) A Daubert hearing decides whether the expert is correct.
Answer: FALSE
Explanation: As provided in Daubert, the “court must focus on the methodology, not on the
conclusions generated by the methodology.” In other words, a Daubert hearing is not to decide
whether the expert is correct.
Diff: 1
LO: 2-6
AACSB: Analytical Thinking
10) Rule 705 allows an expert to state an opinion without first testifying to the underlying facts
or data.
Answer: TRUE
Explanation: Rule 705 allows an expert to state an opinion without first testifying to the
underlying facts or data.
Diff: 1
LO: 2-5
AACSB: Analytical Thinking
3
2.2 Multiple-Choice Questions
1) Which of the following is an example of sanctions in civil cases?
A) capital punishment
B) home confinement
C) probation
D) compensation for economic damages
Answer: D
Explanation: D) In civil cases, sanctions generally involve compensation for loss or wrongs
suffered (for example, economic damages).
Diff: 1
LO: 2-1
AACSB: Analytical Thinking
2) Which of the following best describes civil justice?
A) justice between parties to a dispute, regardless of any larger principles that might be involved
B) justice concerned with the private affairs of citizens and their respective rights
C) justice fairly administered according to the rules of substantive law (such as a fair trial)
D) justice that conforms to a moral principle
Answer: B
Explanation: B) Justice concerned with the private affairs of citizens and their respective rights,
including certain freedoms of speech and action and equal treatment, protection, and
opportunities regardless of race, sex, or religion is known as civil justice.
Diff: 1
LO: 2-1
AACSB: Analytical Thinking
3) Which of the following forms of justice is fairly administered according to the rules of
statutory law?
A) social justice
B) civil justice
C) substantial justice
D) criminal justice
Answer: C
Explanation: C) Substantial justice is justice fairly administered according to the rules of
substantive law (such as a fair trial).
Diff: 2
LO: 2-1
AACSB: Analytical Thinking
4
4) Which of the following scenarios, if identified, can result in a mistrial?
A) Ginny, one of the jury, avidly followed the polls conducted by the media to know the people’s
opinion on the trial.
B) Derek, the defense attorney, concealed his client’s drinking habit as he felt it would be
prejudicial to the client in the ongoing case of banking fraud.
C) Silvia, the attorney for the prosecution, raised an objection for every evidence presented by
the defense attorney.
D) Rico, an expert witness, stated an opinion on the evidence without first testifying to the
underlying facts.
Answer: A
Explanation: A) Verdicts are (or are expected to be) decided based on the evidence presented
during the trial. Consideration of outside information, which has not been subjected to challenge,
violates the rules of evidence. If identified, such violations can result in removal of the juror/s,
mistrials, or appeals.
Diff: 2
LO: 2-1
AACSB: Analytical Thinking
5) Igor, a wealthy entrepreneur, was involved in embezzlement of cash from the office and tax
evasion. If discovered, which of the following will he be charged under?
A) criminal law
B) constitutional law
C) administrative law
D) civil law
Answer: A
Explanation: A) Embezzlement cases are covered under criminal law.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
6) Which of the following is true of our justice system?
A) The law is fast; litigation lasts for one or two hours.
B) Trials (aside from the verdict) provide a lot of drama.
C) Closing arguments and cross examination are the most important parts of a trial.
D) The role of the jury is not passive.
Answer: D
Explanation: D) Jury selection and opening statements are the most important parts of a trial.
The role of the jury is not passive. Because jurors serve as the trier of fact, they must actively
evaluate the evidence and decide who and what to believe.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
5
7) Which of the following rules of Federal Rules of Civil Procedure limits discovery of an
expert’s communications with engaging counsel and any report drafts that may be prepared?
A) Rule 26(b)(1)
B) Rule 26(b)(4)
C) Rule 26(a)(2)
D) Rule 26(e)(2)
Answer: B
Explanation: B) Rule 26(b)(4) of Federal Rules of Civil Procedure limits discovery of an
expert’s communications with engaging counsel and any report drafts that may be prepared. It
also limits discovery of facts and opinions held by an expert who is engaged to assist counsel in
trial preparation (a consulting expert) but not expected to be called as a witness.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
8) Which of the following stages applies to a criminal case but not to a civil case?
A) pleading stage
B) discovery stage
C) trial stage
D) sentencing stage
Answer: D
Explanation: D) The basic structure of a criminal case is similar to that of a civil case, with the
addition of a fourth stage-sentencing.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
9) Which of the following is a difference between criminal cases and civil cases?
A) A complaint should be accompanied by an investigator’s affidavit to initiate a civil case,
whereas filing a complaint is sufficient to initiate a criminal case.
B) A defendant has an amount of time (20 days) to respond to the complaint in a civil case,
whereas he or she enters a plea to the charge during the first appearance in a criminal case.
C) A defendant can only enter a plea of guilty or not guilty to charges in a civil case, whereas he
or she can also claim lack of sufficient knowledge to respond or assert affirmative defenses in a
criminal case.
D) Failing to file a timely response can result in a default judgment in a civil case, whereas
failing to file a timely response can result in a declaratory judgment in a criminal case.
Answer: B
Explanation: B) In a civil case, once a defendant has been served with the complaint, the
individual or entity has a limited amount of time (20 days) to respond by filing an answer. In a
criminal case, during the first appearance, the defendant also enters a plea to the charge or
charges-guilty or not guilty.
Diff: 3
LO: 2-2
AACSB: Analytical Thinking
6
10) Which of the following is a difference between civil law and criminal law?
A) The purpose of civil law is to resolve disputes between individuals or entities, whereas the
purpose of criminal law is to convict and punish offenders.
B) Under civil law, the burden of proof is on the government, whereas under criminal law, the
burden of proof is on the plaintiff.
C) Under civil law, the responding party is the government, whereas under criminal law, the
responding party is the defendant.
D) Civil law sanctions may include imprisonments, whereas criminal law sanctions include
compensations but not imprisonments.
Answer: A
Explanation: A) The purpose of civil law is to resolve disputes between individuals or entities,
whereas the purpose of criminal law is to convict and punish offenders.
Diff: 2
LO: 2-2
AACSB: Analytical Thinking
11) Which of the following is true of a civil proceeding?
A) The pleading stage is followed by the trial stage.
B) The evidence is evaluated by the judge in order to reach a verdict.
C) Failure on the part of the defendant to file a timely response can result in a declaratory
judgment.
D) The discovery process is governed by the Federal Rules of Civil Procedure in federal courts.
Answer: D
Explanation: D) In federal courts, the discovery process is governed by the Federal Rules of
Civil Procedure (FRCP). Although states may determine their own rules, most have adopted
rules that are modelled after the FRCP.
Diff: 1
LO: 2-2
AACSB: Analytical Thinking
12) Andre LeFevre, a testifying expert, failed to include changes to the case. These were not
been previously presented in his report. He is expecting that this information will be offered at
the trial. Which of the following rules of the Federal Rules of Civil Procedure has been violated
by Andre?
A) Rule 26(b)(1)
B) Rule 26(b)(4)
C) Rule 26(e)(2)
D) Rule 26(a)(2)
Answer: C
Explanation: C) Rule 26(e)(1) requires a testifying expert to supplement his or her report to
include any changes or additional information that has not been previously presented but is
expected to be offered at trial.
Diff: 3
LO: 2-2
AACSB: Reflective Thinking
7
13) The trial stage of a legal proceeding involves the voir dire process. What does this process
involve?
A) It is a process wherein residents from the local county are randomly selected and summoned
to the court to serve as prospective jurors.
B) It is a process wherein the jurors collectively evaluate the evidence to render a verdict.
C) It is a process wherein all evidence is presented to the jury through witnesses (such as a
forensic accountant).
D) It is a process wherein the judge and the attorneys question prospective jurors about their
backgrounds and beliefs.
Answer: D
Explanation: D) The jury is selected through a process known as voir dire, wherein the judge
and the attorneys question prospective jurors about their backgrounds and beliefs.
Diff: 2
LO: 2-2
AACSB: Analytical Thinking
14) Which of the following best describes the meaning of burden of proof in a trial?
A) It is the obligation of the plaintiff or prosecution to prove liability or guilt.
B) It is the obligation of the jury to prove guilty and reach a verdict after a trial.
C) It is the obligation of the defendant to prove his or her innocence.
D) It is the obligation of the expert witness to prove his or her reliability in the court.
Answer: A
Explanation: A) The burden of proof is the obligation of the plaintiff or prosecution to prove
liability (in a civil case) or guilt (in a criminal case). The defendant is not required to prove his or
her innocence-it is presumed.
Diff: 2
LO: 2-3
AACSB: Analytical Thinking
15) Which of the following statements is true of standards of proof?
A) Preponderance of evidence is a higher standard of proof than clear and convincing evidence.
B) In a civil case, the requisite standard is a preponderance of the evidence.
C) Clear and convincing evidence is evidence that is probably true.
D) Preponderance of evidence is evidence that can be proved beyond a reasonable doubt.
Answer: B
Explanation: B) In a civil case, the requisite standard is a preponderance of the evidence-more
likely than not (>50% probability).
Diff: 2
LO: 2-3
AACSB: Analytical Thinking
8
16) Which of the following statements is true of the two means of settling disputes between
parties?
A) Alternative dispute resolution is less expensive than litigation.
B) Litigation is faster than alternative dispute resolution.
C) Litigation allows for greater privacy than alternative dispute resolution.
D) Alternative dispute resolution allows for more transparency than litigation.
Answer: A
Explanation: A) Alternative dispute resolution may be preferred over litigation because it is less
expensive, is generally faster, and allows for greater privacy.
Diff: 1
LO: 2-3
AACSB: Analytical Thinking
17) Which of the following statements is true of rules of evidence?
A) The rules of evidence allow expert witnesses greater latitude than other witnesses to testify
based on evidence that would not otherwise be admissible.
B) The rules of evidence allow other witnesses greater latitude than expert witnesses to testify
based on evidence that would not otherwise be admissible.
C) The rules of evidence do not allow both expert witnesses and other witnesses to testify based
on evidence that is not admissible.
D) The rules of evidence allow expert witnesses and other witnesses great latitude to testify
based on evidence that would not otherwise be admissible.
Answer: A
Explanation: A) The rules of evidence allow expert witnesses greater latitude than other
witnesses to testify based on evidence (such as hearsay evidence) that would not otherwise be
admissible.
Diff: 1
LO: 2-4
AACSB: Analytical Thinking
18) Which of the following is the purpose of the Federal Rules of Evidence?
A) to set standards for evidence to be admissible in court
B) to dictate the manner in which evidence is to be presented to the jury
C) to seek justice and truth in a fair and reasonable manner
D) to reduce the delay in trial due to unavailability of evidence
Answer: C
Explanation: C) The purpose of the Federal Rules of Evidence is to seek justice and truth in a
fair and reasonable manner.
Diff: 1
LO: 2-5
AACSB: Analytical Thinking
9
19) Which of the following is a criterion under Rule 702 of the Federal Rules of Evidence for an
expert testimony to be admissible?
A) The testimony can be accepted within the professional community.
B) The testimony is based on reliable assumptions.
C) The testimony is given in relation to scientific, technical, or other specialized knowledge.
D) The testimony is the product of reliable principles and methods.
Answer: D
Explanation: D) Under Rule 702, expert testimony is admissible only if it meets three specific
criteria:
1. The testimony is based on sufficient facts or data.
2. The testimony is the product of reliable principles and methods.
3. The principles and methods have been applied reliably to the facts of the case.
Diff: 1
LO: 2-5
AACSB: Analytical Thinking
20) Which of the following scenarios indicates the application of Rule 702 of the Federal Rules
of Evidence?
A) The plaintiff engages Ali, an attorney, to represent them in court.
B) The attorney calls upon Riya, a construction engineer, to provide evidence on the structural
sufficiency of a building.
C) Pete, a store-owner, appears as a witness to give testimony on a robbery committed outside
his store.
D) The court calls on Fiona, a forensic accountant, to give a statement on the accident that
caused damage to her car.
Answer: B
Explanation: B) Rule 702 allows the testimony of an expert witness if it will assist the trier of
fact (judge or jury) through the maze of “scientific, technical, or other specialized knowledge.” In
this scenario, Riya, a construction engineer, can give the trier of fact a technical perspective on
the structure of a building, thus enabling better understanding of the case.
Diff: 2
LO: 2-5
AACSB: Analytical Thinking
10
21) Which of the following is a difference between Rule 704 and Rule 705 of the Federal Rules
of Evidence?
A) Rule 704 allows an expert to state an opinion without first testifying to the underlying facts or
data, whereas Rule 705 allows an expert to testify to the underlying facts or data.
B) Rule 704 allows an expert to testify on areas that embrace an ultimate issue to be decided by
the fact finder, whereas Rule 705 allows an expert witness a considerable degree of latitude
regarding the facts or data upon which his or her opinions are based.
C) Rule 704 allows an expert to testify on areas that embrace an ultimate issue to be decided by
the fact finder, whereas Rule 705 allows an expert to state an opinion without first testifying to
the underlying facts or data.
D) Rule 704 allows an expert witness a considerable degree of latitude regarding the facts or data
upon which his or her opinions are based, whereas Rule 705 allows an expert to testify on areas
that embrace an ultimate issue to be decided by the fact finder.
Answer: C
Explanation: C) Rule 704 allows an expert to testify on areas that embrace an ultimate issue to
be decided by the fact finder. Rule 705 allows an expert to state an opinion without first
testifying to the underlying facts or data, with the understanding that the opinion is subject to
cross-examination.
Diff: 3
LO: 2-5
AACSB: Analytical Thinking
22) Which of the following does Rule 705 of the Federal Rules of Evidence allow?
A) It allows an expert to state an opinion without first testifying to the underlying facts or data,
with the understanding that the opinion is subject to cross-examination.
B) It allows an expert to testify on areas that embrace an ultimate issue to be decided by the fact
finder.
C) It allows an expert witness a considerable degree of latitude regarding the facts or data upon
which his or her opinions are based.
D) It allows the testimony of an expert witness if it will assist the trier of fact (judge or jury)
through the maze of “scientific, technical, or other specialized knowledge.”
Answer: A
Explanation: A) Rule 705 allows an expert to state an opinion without first testifying to the
underlying facts or data, with the understanding that the opinion is subject to cross-examination.
This cross-examination is important because an expert’s opinion is only as good as the facts,
assumptions, data, and methodology upon which it is based.
Diff: 2
LO: 2-5
AACSB: Analytical Thinking
11
23) Fingerprints and DNA samples are examples of
A) direct evidence.
B) documentary evidence.
C) character evidence.
D) circumstantial evidence.
Answer: D
Explanation: D) Circumstantial evidence is evidence based on inference and not on personal
knowledge or observation; also known as indirect evidence. Examples include fingerprints and
DNA samples or, in a financial crime, evidence of the defendant’s lifestyle.
Diff: 1
LO: 2-5
AACSB: Analytical Thinking
24) Which of the following is an example of hearsay evidence?
A) The attorney called on Anna to present her version of the events that took place during her
class.
B) The police recorded a statement from Tina, which claims that she often heard the neighbors
complain about the suspect’s behavior.
C) The detective testified that the fingerprints lifted from the scene of crime had been identified
as those of the suspect.
D) The prosecution presented a copy of the legal will of the deceased that had been altered by the
defendant.
Answer: B
Explanation: B) Hearsay evidence is testimony given by a witness who relates not what he/she
knows personally, but rather what others have said. It depends on the credibility of someone
other than the witness.
Diff: 2
LO: 2-5
AACSB: Analytical Thinking
25) Which of the following best describes a Daubert challenge?
A) It is a challenge faced by the judge when the jury is equally divided over a verdict.
B) It is a method used by the jury to evaluate the testimony given during a trial.
C) It is a special hearing conducted before the trial judge to determine the relevance and
reliability of an expert’s opinion.
D) It is a process by which the defendant challenges the prosecution’s evidence.
Answer: C
Explanation: C) A Daubert challenge is a special hearing conducted before the trial judge to
determine the relevance and reliability of an expert’s opinion-that is, to rule on its admissibility.
Diff: 2
LO: 2-6
AACSB: Analytical Thinking
12
26) Which of the following is a factor to be considered when evaluating expert testimony under
the Daubert challenge?
A) how well accepted the methodology is within the professional community
B) what the known or potential success rate of the method is
C) whether the theory can be backed by evidence
D) whether the theory can be comprehended by the community
Answer: A
Explanation: A) Daubert set forth several factors that should be considered when evaluating
expert testimony. One of these factors is how well accepted the methodology is within the
professional community.
Diff: 2
LO: 2-6
AACSB: Analytical Thinking
27) Which of the following are the three cases that make up the Daubert trilogy?
A) Daubert v. Merrell Dow Pharmaceuticals, G.E. v. Joiner, and Upjohn Co. v. United States.
B) Daubert v. Merrell Dow Pharmaceuticals, Kumho Tire v. Carmichael, and Hickman v.
Taylor.
C) Daubert v. Merrell Dow Pharmaceuticals, G.E. v. Joiner, and Kumho Tire v. Carmichael.
D) Daubert v. Merrell Dow Pharmaceuticals, Hickman v. Taylor, and Upjohn Co. v. United
States.
Answer: C
Explanation: C) Daubert v. Merrell Dow Pharmaceuticals, G.E. v. Joiner, and Kumho Tire v.
Carmichael are the three cases that make up the Daubert trilogy.
Diff: 2
LO: 2-6
AACSB: Analytical Thinking
28) Which rule does the Daubert trilogy serve to interpret?
A) Rule 705
B) Rule 704
C) Rule 703
D) Rule 702
Answer: D
Explanation: D) Together, the three cases, known as the “Daubert trilogy,” serve to interpret
Rule 702.
Diff: 1
LO: 2-6
AACSB: Analytical Thinking
13
29) Which of the following is a drawback of the Frye test?
A) It is not flexible enough to address new scientific issues where general acceptance has not yet
been established.
B) It does not allow room for additional evidence to be considered when the initial evidence is
insufficient.
C) It does not admit evidence given by an expert if the evidence is not based on a well-known
method.
D) It is not extensive enough to address the latest developments in civil and criminal law.
Answer: A
Explanation: A) Critics of the Frye test argue that it is not flexible enough to address new
scientific issues where general acceptance has not yet been established.
Diff: 2
LO: 2-6
AACSB: Analytical Thinking
30) Which of the following is a legal principle that protects communications taking place within
a protected relationship?
A) protected communication
B) privileged communication
C) guarded communication
D) secured communication
Answer: B
Explanation: B) Privileged communication is a legal principle that protects communications
taking place within a protected relationship.
Diff: 1
LO: 2-7
AACSB: Analytical Thinking
31) What is the underlying theory of privileged communication?
A) The parties in a protected relationship are liable to disclose details of the communication
taking place between them.
B) The society has a right to be aware of the communication within a protected relationship.
C) The privacy and confidentiality of a communication within a protected relationship has to be
maintained.
D) In certain instances, society is best served by the suppression (protection from disclosure) of
information.
Answer: D
Explanation: D) The underlying theory of privileged communication, articulated by the U.S.
Supreme Court in Upjohn Co. v. United States (1981), is that in certain instances, society is best
served by the suppression (protection from disclosure) of information.
Diff: 1
LO: 2-7
AACSB: Analytical Thinking
14
32) A requisite element for establishing privilege in an attorney-client privilege includes a
communication that
A) is made to a person the client reasonably believed was an attorney.
B) relates to rendering personal services.
C) is irrelevant for the jury to reach a verdict.
D) contains detail that can harm the client.
Answer: A
Explanation: A) The requisite elements for establishing privilege include a communication that
relates to the rendering of legal services, is made in confidence, and is made to a person the
client reasonably believed was an attorney.
Diff: 2
LO: 2-7
AACSB: Analytical Thinking
33) Which of the following best defines the term attorney-client privilege?
A) It is the client’s right to refuse to disclose and to prevent any other person from disclosing
confidential communications between the client and the attorney.
B) It is the attorney’s right to refuse to disclose and to prevent the testifying expert from
disclosing confidential communications between the client and the attorney.
C) It is the client’s obligation to disclose confidential communications between the client and the
attorney.
D) It is the attorney’s right to refuse to disclose and to prevent any other person from disclosing
confidential communications between the attorney and the testifying expert.
Answer: A
Explanation: A) Attorney-client privilege is defined as the “client’s right to refuse to disclose
and to prevent any other person from disclosing confidential communications between the client
and the attorney.”
Diff: 2
LO: 2-7
AACSB: Analytical Thinking
15
34) Which of the following is a similarity between attorney-client privilege and work product
doctrine?
A) Both allow lawyers to prepare for litigation but with the risk that their work will be revealed
to court adversaries.
B) Both are intended to encourage individuals involved in legal disputes to be candid with their
attorneys, thus enabling the attorneys to give sound legal advice.
C) Both can be extended to non-attorneys who assist attorneys in rendering legal advice or
services.
D) Both provide protection from discovery of documents and other items prepared by an attorney
in anticipation of a trial.
Answer: C
Explanation: C) Consistent with the rules governing attorney-client privilege, the work product
doctrine can be extended to items prepared by non-attorneys who assist in rendering legal
services.
Diff: 2
LO: 2-7
AACSB: Analytical Thinking
35) What was the result of amending FRCP 26(b)(4) to allow the extension of work product
protection to most attorney-expert communications and to all draft expert reports?
A) It reduced the cost of litigation, but made the process more complex.
B) It increased the cost of litigation and made the process more complex.
C) It reduced the cost of litigation and made the process more efficient.
D) It increased the cost of litigation and simplified the process.
Answer: C
Explanation: C) FRCP 26(b)(4) was amended to allow the extension of work product protection
to most attorney-expert communications and to all draft expert reports. This was a highly
practical change, which served to reduce the cost of litigation and make the process more
efficient.
Diff: 2
LO: 2-7
AACSB: Analytical Thinking
16
2.3 Short-Answer Questions
1) Rule 26(a)(2) of the Federal Rules of Civil Procedure requires the disclosure of all experts
(such as forensic accountants) expected to testify at trial. The disclosure is generally
accompanied by the expert’s written report. List the elements that should be contained in the
expert’s written report.
Answer: The expert’s written report must contain the following elements:
1. A complete statement of all opinions the witness will express, along with the basis and reasons
for them.
2. The facts or data considered by the witness in forming the opinions.
3. Any exhibits that will be used to summarize or support the opinions.
4. The witness’s qualifications, including a list of all publications authored in the preceding ten
years.
5. A list of all other cases in which the witness has testified as an expert (either at trial or by
deposition) during the preceding four years.
6. A statement of the compensation to be paid for the study and testimony in the case.
Diff: 2
LO: 2-2
AACSB: Analytical Thinking
2) Explain the structure of a criminal case.
Answer: The basic structure of a criminal case is similar to that of a civil case, with the addition
of a fourth stage-sentencing. However, the pleading stage of a criminal case is very different.
Criminal cases are initiated with a criminal complaint accompanied by an investigator’s affidavit
that summarizes the evidence against the defendant. During the first appearance (arraignment),
the defendant is informed of the charges and advised of his or her rights. At this time, the
defendant also enters a plea to the charge or charges-guilty or not guilty. This is followed by the
discovery stage and the trial stage, as discussed previously. If the defendant is found not guilty,
the case is over; if found guilty, the case then moves to the sentencing stage. The verdict in a
criminal case (guilty or not guilty) differs from the verdict in a civil case, wherein the defendant
is found either liable or not liable (for damages). Prior to sentencing by the court, the case is
evaluated by the probation department, which prepares a pre-sentence report (PSR). The PSR
summarizes the case (including the crime, the case facts, and the offender’s profile) and offers a
recommendation for sentencing.
Diff: 2
LO: 2-2
AACSB: Analytical Thinking
17
3) Write a brief note on standard of proof.
Answer: The presumption of innocence must be overcome by a certain standard of proof, which
describes the amount of evidence the plaintiff must present to prove its case. In a civil case, the
requisite standard is a preponderance of the evidence-more likely than not (>50% probability).
Some civil cases (such as civil fraud) must be proven by clear and convincing evidence. Clear
and convincing is greater than preponderance, but no specific percentage can be assigned. In a
criminal case, the prosecution has a legal obligation to prove all elements of an alleged offense
(such as fraud, tax evasion, or murder) beyond a reasonable doubt. Again, no percentage can be
assigned. The applicable burden and standard of proof are explained to the jury by the judge and
included in the jury instructions. The forensic accountant must understand the requisite standard
of proof for any litigation engagement and articulate his or her opinion accordingly.
Diff: 2
LO: 2-3
AACSB: Analytical Thinking
4) What are the two most common forms of alternate dispute resolution?
Answer: The most common forms of alternative dispute resolution are mediation and arbitration.
Mediation is a non-binding informal process wherein a mediator evaluates the arguments of both
sides and helps the parties reach common ground. If mediation fails, the parties may proceed
with litigation. Arbitration, on the other hand, is a “mini trial” wherein each party presents its
case to one or more arbitrators, who render a binding decision that generally cannot be appealed.
Arbitration is often voluntary but can also be mandatory.
Diff: 2
LO: 2-3
AACSB: Analytical Thinking
5) What is relevant evidence as defined by FRE 401?
Answer: According to FRE 401, relevant evidence must have the “tendency to make a fact more
or less probable than it would be without the evidence,” and the fact must be “of consequence in
determining the action.” As a general principle, all relevant evidence is admissible unless it is
inadmissible due to another rule of evidence or law. FRE 403 allows relevant evidence to be
excluded if its probative value is substantially outweighed by danger of unfair prejudice, of
confusing or misleading the jury, or of wasting the court’s time. The presentation of evidence is
subject to objection by the opposing party. The basis of an objection must be stated (for example,
prejudice or hearsay) and will be ruled on by the court-overruled or sustained. In addition to
probative value exclusions, many social policies operate to exclude relevant evidence.
Diff: 2
LO: 2-5
AACSB: Analytical Thinking
