Exam 9: Auditing for Fraud

The audit team asks management for original documents related to sales contracts.Despite the team's persistence,management does not supply the documents for over two weeks.With the use of professional skepticism,what should this audit team be most concerned with as it relates to the documents?

The focus of forensic accounting is similar to financial statement auditing in that it is directed to the fairness of financial statements.

Fraud risks that may lead to material misstatement Identify risks that the auditor should consider during brainstorming that may result in material misstatement due to fraud.

Which of the following is required of the audit team relative to its consideration of fraud in a financial statement audit?

Which of the following best represents an example of fraud utilizing the lapping technique?

Consideration of fraud in an audit Auditors are required to actively conduct a financial statement audit with the mindset that fraud may exist.What is the general process that an auditor goes through to assess the risk of fraud and test accordingly?

A board of directors that is actively involved in monitoring management mitigates opportunities to commit fraud.

According to the Association of Certified Fraud Examiners,corruption includes the act of accepting undue payments from suppliers to accept products into the organization.

An example of a defalcation is the CFO intentionally overstating the accounts receivable and sales to boost profits.

What is the greatest benefit that can be derived by discussing fraud factors with management of the client organization under audit?

Which of the following is not one of the components of the fraud triangle?

An ideal method of footing a large report and recalculating extensions is the use of generalized audit software to extract the data and perform the test.

When the risk of fraud is high in financial statements,the auditor should assign less experienced auditors to the engagement.

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

Fraud motivations and factors Research consistently shows that there are three elements present when most frauds occur.List these elements and at least three related fraud factors that may exist for each.

Internal controls are implemented in order to give perpetrators the impression that the risk of being caught is low.

The most important lesson to be learned from the famous "salad oil case" is that a client can commit fraud by falsely moving inventory during a physical count to overstate the inventory balance.