Question 1

Information about criminal rackets and cons and their operations and the reputations of local businesses can be found at the

Accepted Answer

A)  Police and Drug Enforcement Agency. 
B)  Standard & Poor Registers. 
C)  Securities and Exchange Commission. 
D)  Better Business Bureau. 
A)  Police and Drug Enforcement Agency. 
B)  Standard & Poor Registers. 
C)  Securities and Exchange Commission. 
D)  Better Business Bureau.

Question 2

In preparing for the audit of cash,the auditors perform analytical procedures concerning cash balances.Which of the following would be the best source of information for use in the estimate of cash?

Accepted Answer

A)  Prior-years' balances. 
B)  Management inquiry. 
C)  Cash budgets. 
D)  Aged accounts receivable reports. 
A)  Prior-years' balances. 
B)  Management inquiry. 
C)  Cash budgets. 
D)  Aged accounts receivable reports.

Question 3

Which of the following is not considered one of the three factors increasing the probability of fraud?

Accepted Answer

A)  Motive. 
B)  Lack of training. 
C)  Opportunity. 
D)  Rationalization. 
A)  Motive. 
B)  Lack of training. 
C)  Opportunity. 
D)  Rationalization.

Question 4

Fraud examinations should begin only after sufficient _____________________________ leads to the belief that a fraud has occurred.

Accepted Answer

The answer of Fraud examinations should begin only after sufficient...

Question 5

A practice that would not encourage fraud would include

Accepted Answer

A)  Centralizing authority in top management. 
B)  Considering people pressure in the work place. 
C)  Making profits the only criterion for success. 
D)  Insisting that everything be documented with a rule for everything. 
A)  Centralizing authority in top management. 
B)  Considering people pressure in the work place. 
C)  Making profits the only criterion for success. 
D)  Insisting that everything be documented with a rule for everything.

Question 6

An organization can prevent all fraud if its auditors are acquainted with some detection techniques.

Accepted Answer

A) True 
 B)False

Question 7

Describe how a lockbox works and indicate the advantages of such a system

Accepted Answer

A lockbox is box that locks,such as ones

Question 8

A code of ethics is an important element of a fraud prevention program.Which of the following would diminish the effectiveness of a company's code of conduct?

Accepted Answer

A)  The establishment of a chief ethics officer. 
B)  The establishment of a hot line for reporting unethical behavior. 
C)  The violation of the code of ethics by senior management. 
D)  The posting of the code of ethics in the company workplace. 
A)  The establishment of a chief ethics officer. 
B)  The establishment of a hot line for reporting unethical behavior. 
C)  The violation of the code of ethics by senior management. 
D)  The posting of the code of ethics in the company workplace.

Question 9

Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements?

Accepted Answer

A)  All checks must be signed by an officer designated by the board of directors. 
B)  All signed checks must be reviewed and compared with supporting documentation by the treasurer before mailing. 
C)  All checks must be sequentially numbered and accounted for by internal auditors. 
D)  All checks must be perforated or otherwise effectively canceled when they are returned with the bank statement. 
A)  All checks must be signed by an officer designated by the board of directors. 
B)  All signed checks must be reviewed and compared with supporting documentation by the treasurer before mailing. 
C)  All checks must be sequentially numbered and accounted for by internal auditors. 
D)  All checks must be perforated or otherwise effectively canceled when they are returned with the bank statement.

Question 10

What kind of error or fraud could happen if the inventory warehouse manager also had responsibility for making the physical inventory count and reconciling discrepancies to the perpetual inventory records?

Accepted Answer

The inventory manager could
a.Commit an

Question 11

The use of confirmations for cash balances is still considered a generally accepted audit procedure.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following combinations is a good means to conceal employee fraud but an ineffective means of perpetrating management (financial reporting)fraud?

Accepted Answer

A)  Overstating sales revenue and overstating customer accounts receivable balances. 
B)  Overstating sales revenue and overstating bad debt expense. 
C)  Understating interest expense and understating accrued interest payable. 
D)  Omitting the disclosure information about related-party sales to the president's relatives at below-market prices. 
A)  Overstating sales revenue and overstating customer accounts receivable balances. 
B)  Overstating sales revenue and overstating bad debt expense. 
C)  Understating interest expense and understating accrued interest payable. 
D)  Omitting the disclosure information about related-party sales to the president's relatives at below-market prices.

Question 13

A good fraud prevention program should address employees' motivation to steal from the company.The best method for doing this is to

Accepted Answer

A)  Establish employee assistance programs. 
B)  Require a fidelity bond on all employees. 
C)  Require reconciliations of all accounts to be reviewed by a supervisor. 
D)  Ensure that all accounts with high inherent risk of fraud are audited. 
A)  Establish employee assistance programs. 
B)  Require a fidelity bond on all employees. 
C)  Require reconciliations of all accounts to be reviewed by a supervisor. 
D)  Ensure that all accounts with high inherent risk of fraud are audited.

Question 14

The nature of extended procedures is limited only by a(n)________________________________.

Accepted Answer

auditor's

Question 15

To gather evidence regarding the balance in a bank reconciliation,an auditor would examine all of the following except the

Accepted Answer

A)  Cutoff bank statement. 
B)  General ledger. 
C)  Bank confirmation. 
D)  Year-end bank statement. 
A)  Cutoff bank statement. 
B)  General ledger. 
C)  Bank confirmation. 
D)  Year-end bank statement.

Question 16

Immediately upon receipt of cash,a responsible employee should

Accepted Answer

A)  Record the amount in the cash receipts journal. 
B)  Prepare a remittance listing. 
C)  Update the subsidiary accounts receivable records. 
D)  Prepare a deposit slip in triplicate. 
A)  Record the amount in the cash receipts journal. 
B)  Prepare a remittance listing. 
C)  Update the subsidiary accounts receivable records. 
D)  Prepare a deposit slip in triplicate.

Question 17

When auditing with "fraud awareness," auditors should especially notice and follow up employee activities under which of these conditions?

Accepted Answer

A)  The company always estimates the inventory but never takes a complete physical count. 
B)  The petty cash box is always locked in the desk of the custodian. 
C)  Management has published a company code of ethics and sends frequent communication newsletters about it. 
D)  The board of directors reviews and approves all investment transactions. 
A)  The company always estimates the inventory but never takes a complete physical count. 
B)  The petty cash box is always locked in the desk of the custodian. 
C)  Management has published a company code of ethics and sends frequent communication newsletters about it. 
D)  The board of directors reviews and approves all investment transactions.

Question 18

__________________________________ is a reconciliation in which the bank balance,the bank report of cash deposited,and the bank report of cash paid are all reconciled to the client's general ledger.

Accepted Answer

The answer of __________________________________ is a reconciliation in which the...

Question 19

When auditing financial statements and finding indications of a possible misappropriation of assets,independent auditors should

Accepted Answer

A)  Investigate fully to determine the total amount of the misappropriation. 
B)  Determine which accounts are affected and the amount by which they are overstated or understated. 
C)  Determine the methods by which the misappropriation was carried out. 
D)  Identify a person(s) who are likely responsible for the misappropriation and obtain evidence about some other fraud indications in their work. 
E)  All of the above. 
A)  Investigate fully to determine the total amount of the misappropriation. 
B)  Determine which accounts are affected and the amount by which they are overstated or understated. 
C)  Determine the methods by which the misappropriation was carried out. 
D)  Identify a person(s) who are likely responsible for the misappropriation and obtain evidence about some other fraud indications in their work. 
E)  All of the above.

Question 20

Fraud examiners are more interested in evaluating internal control weaknesses rather than strengths.

Accepted Answer

A) True 
 B)False

Information about criminal rackets and cons and their operations and the reputations of local businesses can be found at the

In preparing for the audit of cash,the auditors perform analytical procedures concerning cash balances.Which of the following would be the best source of information for use in the estimate of cash?

Which of the following is not considered one of the three factors increasing the probability of fraud?

Fraud examinations should begin only after sufficient _____________________________ leads to the belief that a fraud has occurred.

A practice that would not encourage fraud would include

An organization can prevent all fraud if its auditors are acquainted with some detection techniques.

Describe how a lockbox works and indicate the advantages of such a system

A code of ethics is an important element of a fraud prevention program.Which of the following would diminish the effectiveness of a company's code of conduct?

Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements?

What kind of error or fraud could happen if the inventory warehouse manager also had responsibility for making the physical inventory count and reconciling discrepancies to the perpetual inventory records?

The use of confirmations for cash balances is still considered a generally accepted audit procedure.

Which of the following combinations is a good means to conceal employee fraud but an ineffective means of perpetrating management (financial reporting)fraud?

A good fraud prevention program should address employees' motivation to steal from the company.The best method for doing this is to

The nature of extended procedures is limited only by a(n)________________________________.

To gather evidence regarding the balance in a bank reconciliation,an auditor would examine all of the following except the

Immediately upon receipt of cash,a responsible employee should

When auditing with "fraud awareness," auditors should especially notice and follow up employee activities under which of these conditions?

__________________________________ is a reconciliation in which the bank balance,the bank report of cash deposited,and the bank report of cash paid are all reconciled to the client's general ledger.

When auditing financial statements and finding indications of a possible misappropriation of assets,independent auditors should

Fraud examiners are more interested in evaluating internal control weaknesses rather than strengths.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 6: Employee Fraud and the Audit of Cash

Information about criminal rackets and cons and their operations and the reputations of local businesses can be found at the

In preparing for the audit of cash,the auditors perform analytical procedures concerning cash balances.Which of the following would be the best source of information for use in the estimate of cash?

Which of the following is not considered one of the three factors increasing the probability of fraud?

Fraud examinations should begin only after sufficient _____________________________ leads to the belief that a fraud has occurred.

A practice that would not encourage fraud would include

An organization can prevent all fraud if its auditors are acquainted with some detection techniques.

Describe how a lockbox works and indicate the advantages of such a system

A code of ethics is an important element of a fraud prevention program.Which of the following would diminish the effectiveness of a company's code of conduct?

Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements?

What kind of error or fraud could happen if the inventory warehouse manager also had responsibility for making the physical inventory count and reconciling discrepancies to the perpetual inventory records?

The use of confirmations for cash balances is still considered a generally accepted audit procedure.

Which of the following combinations is a good means to conceal employee fraud but an ineffective means of perpetrating management (financial reporting)fraud?

A good fraud prevention program should address employees' motivation to steal from the company.The best method for doing this is to

The nature of extended procedures is limited only by a(n)________________________________.

To gather evidence regarding the balance in a bank reconciliation,an auditor would examine all of the following except the

Immediately upon receipt of cash,a responsible employee should

When auditing with "fraud awareness," auditors should especially notice and follow up employee activities under which of these conditions?

__________________________________ is a reconciliation in which the bank balance,the bank report of cash deposited,and the bank report of cash paid are all reconciled to the client's general ledger.

When auditing financial statements and finding indications of a possible misappropriation of assets,independent auditors should

Fraud examiners are more interested in evaluating internal control weaknesses rather than strengths.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters