Exam 2: The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

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 21

An example of fraudulent financial reporting is the treasurer's diversion of hundreds of thousands of dollars into a personal money market account.

(True/False)

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Question 22

There are many important reasons for diligent audit planning.If an audit firm wrongly skips the planning stage of an audit,what will be the effect relative to fraud detection?

(Multiple Choice)

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Question 23

The audit team should develop its own ideas about how fraud may be performed by the client and then covered up.

(True/False)

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Question 24

The audit committee should have the authority to hire and fire the external auditor.

(True/False)

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Question 25

Auditors must keep a questioning mind when analyzing management responses to inquiry,and auditors should strive to obtain corroborating evidence before accepting management's responses.

(True/False)

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Question 26

Management may feel pressure to maintain debt covenants,which is a deterrent to fraud.

(True/False)

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Question 27

Which of the following best describes professional skepticism?

(Multiple Choice)

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Question 28

Auditing standards have historically reflected an expectation that auditors will detect and report every instance of material fraud.

(True/False)

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Question 29

Why is fraud detection an important part of the audit?

(Multiple Choice)

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Question 30

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

(Multiple Choice)

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Question 31

Which of the following frauds involved primarily asset misappropriation?

(Multiple Choice)

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Question 32

One fraud risk factor includes the presence of domineering members of management who seek the ultimate loyalty of subordinates.

(True/False)

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Question 33

Protection Transparency,Inc.is being audited by Messer and Bromely,LLP.During the assessment of fraud,Messer and Bromely discover that the controller has been creating fictional sales and posting them to the general ledger.Who should the auditors make aware of this issue?

(Multiple Choice)

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Question 34

BruceCo.has accounted for the revenue of Jiffy Mac,Inc. ,one of its suppliers,as though it were its subsidiary. BruceCo.has probably committed fraud because of its misapplication of consolidation principles.

(True/False)

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Question 35

Auditor independence under the Sarbanes-Oxley Act What are four requirements of the Sarbanes-Oxley Act that seek to protect auditor independence?

(Essay)

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Question 36

The PCAOB has how many board members?

(Multiple Choice)

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Question 37

Management of Premium Discovery Company is compensated through large salaries,stock options,and bonuses tied to the company's working capital growth.The CEO is constantly holding meetings to ensure that management is on target for increased operating income each month.Based solely on the preceding information,which element of the fraud triangle exists at the Premium Discovery Company?

(Multiple Choice)

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Question 38

The fraud triangle identifies three elements that are generally present in the client's organization when fraud occurs. Which of the following is not one of those elements?

(Multiple Choice)

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Question 39

Which of the following best describes how corporate governance influences an organization?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 119

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

An example of fraudulent financial reporting is the treasurer's diversion of hundreds of thousands of dollars into a personal money market account.

There are many important reasons for diligent audit planning.If an audit firm wrongly skips the planning stage of an audit,what will be the effect relative to fraud detection?

The audit team should develop its own ideas about how fraud may be performed by the client and then covered up.

The audit committee should have the authority to hire and fire the external auditor.

Auditors must keep a questioning mind when analyzing management responses to inquiry,and auditors should strive to obtain corroborating evidence before accepting management's responses.

Management may feel pressure to maintain debt covenants,which is a deterrent to fraud.

Which of the following best describes professional skepticism?

Auditing standards have historically reflected an expectation that auditors will detect and report every instance of material fraud.

Why is fraud detection an important part of the audit?

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

Which of the following frauds involved primarily asset misappropriation?

One fraud risk factor includes the presence of domineering members of management who seek the ultimate loyalty of subordinates.

Protection Transparency,Inc.is being audited by Messer and Bromely,LLP.During the assessment of fraud,Messer and Bromely discover that the controller has been creating fictional sales and posting them to the general ledger.Who should the auditors make aware of this issue?

BruceCo.has accounted for the revenue of Jiffy Mac,Inc. ,one of its suppliers,as though it were its subsidiary. BruceCo.has probably committed fraud because of its misapplication of consolidation principles.

Auditor independence under the Sarbanes-Oxley Act What are four requirements of the Sarbanes-Oxley Act that seek to protect auditor independence?

The PCAOB has how many board members?

The fraud triangle identifies three elements that are generally present in the client's organization when fraud occurs. Which of the following is not one of those elements?

Which of the following best describes how corporate governance influences an organization?

Quality Auditing: Why It Matters

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

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 Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

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