Question 1

Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt?

Accepted Answer

A)  The ability to raise additional funds via borrowings 
B)  A letter of guarantee from a parent company 
C)  The ability to sell an unprofitable segment of the business 
D)  Significant rapid increase in competition 
A)  The ability to raise additional funds via borrowings 
B)  A letter of guarantee from a parent company 
C)  The ability to sell an unprofitable segment of the business 
D)  Significant rapid increase in competition

Question 2

Red flags that auditors can use to alert them to the possibility that a fraud may have occurred include:

Accepted Answer

A)  Strong internal controls. 
B)  Routine transactions. 
C)  A high turnover of key employees. 
D)  Effective internal auditing staff. 
A)  Strong internal controls. 
B)  Routine transactions. 
C)  A high turnover of key employees. 
D)  Effective internal auditing staff.

Question 3

Application controls are policies and procedures that relate to many applications.

Accepted Answer

A) True 
 B)False

Question 4

Saad Zuberov is a rookie auditor who has asked you about financial reporting frauds and how they differ from misappropriation of assets frauds. Identify for Saad Zuberov which one of
The following frauds consists of misappropriation of assets.

Accepted Answer

A)  improper asset valuation 
B)  unrecorded liabilities 
C)  both a and b 
D)  none of these 
A)  improper asset valuation 
B)  unrecorded liabilities 
C)  both a and b 
D)  none of these

Question 5

An example of an attitude or rationalization used to justify a fraud is high volume of
transactions close to year-end.

Accepted Answer

A) True 
 B)False

Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt?

Red flags that auditors can use to alert them to the possibility that a fraud may have occurred include:

Application controls are policies and procedures that relate to many applications.

Saad Zuberov is a rookie auditor who has asked you about financial reporting frauds and how they differ from misappropriation of assets frauds. Identify for Saad Zuberov which one of The following frauds consists of misappropriation of assets.

An example of an attitude or rationalization used to justify a fraud is high volume of transactions close to year-end.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Gaining an Understanding of the Clients System of Internal Controls

Execution of the Audittesting of Controls

Execution of the Auditperforming Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters

Exam 3: Audit Planning I

Which of the following is not an example of a mitigating factor that reduces the risk that the going concern assumption may be in doubt?

Red flags that auditors can use to alert them to the possibility that a fraud may have occurred include:

Application controls are policies and procedures that relate to many applications.

Saad Zuberov is a rookie auditor who has asked you about financial reporting frauds and how they differ from misappropriation of assets frauds. Identify for Saad Zuberov which one of The following frauds consists of misappropriation of assets.

An example of an attitude or rationalization used to justify a fraud is high volume of transactions close to year-end.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Audit Planning II

Audit Evidence

Sampling and Overview of the Risk Response Phase of the Audit

Gaining an Understanding of the Clients System of Internal Controls

Execution of the Audittesting of Controls

Execution of the Auditperforming Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters