Exam 2: The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

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During the time period of 1998 to 2007,the median size of public company perpetrating fraud rose tenfold to $100 million (as compared to the previous ten years).

(True/False)

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Question 61

Which of the following frauds is most common?

(Multiple Choice)

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Question 62

Fraud is an intentional act involving the use of deception that results in a material misstatement of the financial statements.

(True/False)

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Question 63

The fraud triangle requires the auditor to actively consider and assess the risk of fraud for clients and their financial statements.

(True/False)

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Question 64

The landmark Enron fraud in the early 2000's involved the movement of significant debt off the books to related,unconsolidated entities.

(True/False)

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Question 65

Which of the following best represents fraudulent financial reporting?

(Multiple Choice)

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Question 66

Various types of ways that fraud could be perpetrated should be hypothesized by the auditor prior to conducting audit testing.

(True/False)

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Question 67

Fraud consideration by auditors John Beasley is interviewing with public audit firms to become an auditor.John does not believe that fraud is a "big deal" in client organizations and argues that most individuals in management of companies are "honest people".He believes that auditors are becoming too cynical. Describe your response to John's attitude and discuss the major types of fraud that occur in companies.

(Essay)

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Question 68

According to professional auditing standards,which of the following best represents a type of fraudulent financial reporting?

(Multiple Choice)

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Question 69

Which of the following statements reflects an auditor's responsibility for detecting fraud?

(Multiple Choice)

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Question 70

If an auditor discovers evidence of fraud,the planned audit procedures should be adjusted accordingly.

(True/False)

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Question 71

Which of the following factors should an auditor consider in evaluating the effect of fraud upon the planned audit procedures?

(Multiple Choice)

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Question 72

According to COSO studies,the majority of the frauds took place at companies that were listed on the Over-The-Counter (OTC)market,rather than those listed on the NYSE or NASDAQ.

(True/False)

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Question 73

When is the assessment of fraud risk complete?

(Multiple Choice)

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Question 74

Management compensation that is tied to profits may create incentives to commit fraud.

(True/False)

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Question 75

Complex transactions such as derivative instruments provide management certain opportunities to manipulate financial statements to its advantage.

(True/False)

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Question 76

What should an audit team do when it discovers that fraud risk factors are present on an audit engagement?

(Multiple Choice)

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Question 77

Fraud detection procedures should only be performed for clients that have had fraud problems in the past.

(True/False)

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Question 78

Corporate governance is a process by which the owners,but not the creditors,exert control and require accountability for the resources entrusted to the organization.

(True/False)

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Question 79

Which of the following is not one of the components of the fraud risk model?

(Multiple Choice)

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Question 80

Showing 61 - 80 of 120

During the time period of 1998 to 2007,the median size of public company perpetrating fraud rose tenfold to $100 million (as compared to the previous ten years).

Which of the following frauds is most common?

Fraud is an intentional act involving the use of deception that results in a material misstatement of the financial statements.

The fraud triangle requires the auditor to actively consider and assess the risk of fraud for clients and their financial statements.

The landmark Enron fraud in the early 2000's involved the movement of significant debt off the books to related,unconsolidated entities.

Which of the following best represents fraudulent financial reporting?

Various types of ways that fraud could be perpetrated should be hypothesized by the auditor prior to conducting audit testing.

According to professional auditing standards,which of the following best represents a type of fraudulent financial reporting?

Which of the following statements reflects an auditor's responsibility for detecting fraud?

If an auditor discovers evidence of fraud,the planned audit procedures should be adjusted accordingly.

Which of the following factors should an auditor consider in evaluating the effect of fraud upon the planned audit procedures?

According to COSO studies,the majority of the frauds took place at companies that were listed on the Over-The-Counter (OTC)market,rather than those listed on the NYSE or NASDAQ.

When is the assessment of fraud risk complete?

Management compensation that is tied to profits may create incentives to commit fraud.

Complex transactions such as derivative instruments provide management certain opportunities to manipulate financial statements to its advantage.

What should an audit team do when it discovers that fraud risk factors are present on an audit engagement?

Fraud detection procedures should only be performed for clients that have had fraud problems in the past.

Corporate governance is a process by which the owners,but not the creditors,exert control and require accountability for the resources entrusted to the organization.

Which of the following is not one of the components of the fraud risk model?

Auditing: Integral to the Economy

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

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