CFE – Investigation — Question 8

Jana, the controller of XYZ Company, notices that the company’s hotel expenses increased substantially from the prior year. She wants to check to see if this is reasonable by comparing hotel expenses from both years to the number of days XYZ’s employees traveled. Which of the following data analysis functions would be the most useful in helping Jana analyze these two variables?

Answer options

• A. Correlation analysis
• B. Duplicate testing
• C. Verifying multiples of a number
• D. Benford’s Law analysis

Correct answer: D

Explanation

The correct answer is D, Benford’s Law analysis, as it allows for the examination of numerical data distributions, helping to identify anomalies in spending. Correlation analysis (A) would measure the relationship between two variables but may not specifically highlight unusual spending patterns. Duplicate testing (B) and verifying multiples (C) are not relevant for analyzing expense trends in relation to travel days.