1. Fred, employee of ABC Company, notices the company has poor internal controls and lack of segregation of duties. He realizes he could take some cash and record it against miscellaneous expense without anyone catching it if he wanted. Which part of the fraud triangle does Fred's thought relate to?

A. Opportunity

B. Rationalization

C. Pressure

D. None of the Above

2. Auditors must provide _______ assurance that the financial statements are presented ________ in all material respects.

A. Reasonable; Fairly

B. Fairly; Reasonable

C. Complete; Justly

D. Justly; Complete

3. ____are items that management has full control over and is able to delay or eliminate.

A. Nondiscretionary accruals

B. Discretionary accruals

C. Defining Materiality

D. Revenue Recognition

4. ___Requires the auditor to perform professional services with due care.

A. Legal Liability

B. Stat utory Law Liability

C. Common-Law Liability

D. Liability to Clients

5. Which is one of the UKs six principles on what constitutes adequate procedures?

A. Risk Assessment

B. Due diligence

C. Monitoring and Reporting

D. All of the Above

E. None of the above

6. The Fraud Triangle consists of:

Rationalization Incentives & Pressures Opportunities

D. All of the Above

7. A standard auditors report must include which of the following:

What was audited Management & auditors responsibilities Scope of the audit The auditors opinion All of the Above

8. What does privity relationship mean?

A partys financial liability is limited A party can sue if fraud has taken place A party has a contractual obligation A party may be a user of the financial statements

9. When an auditor acts careless in the application of professional standards that it implies a reckless disregard for the standards of due care is referred to as?

A. Negligence B. Due Care C. Fraud D. Constructive Fraud

10. What is the legal term for the intent to deceive, manipulate or defraud?

A. Constructive Fraud B. Due Care C. Misfeasance D. Scienter

11. From an accounting perspective, _____ implies a tendency to defer the recognition of assets and items that increase net income while reserving for possible future declines in earnings:

A. High secrecy B. High professionalism C. High conservatism D. High flexibility

12. According to CIMA code of ethics, When you become so sympathetic to the interests of others as a result of a close relationship that your professional judgment becomes compromised, is considered:

A. Self-interest threat B. Intimidation threat C. Advocacy threat D. Familiarity threat

13. To be appropriate audit evidence must be both:

A. Relevant and reliable B. Significant and documented C. Material and quantitative D. Objective and reasonable

14. Common law liability does not include:

A. Breach of contract B. Legislation passed a state or federal level C. Tort actions D. Legal opinions issued by judges

15. All of the following EXCEPT_______ is part of "The Fraud Triangle"

A. Incentives/Pressures B. Opportunity C. Rationalization D. All of the Above

16. A law suit against an accountant for failing to live up to the terms of a contract is what type of legal liability?

Common-Law liability Foreseeable Legal liability Liability to Third Party Liability to Clients

17. Audit Risk consist of 3 components:

Inherent, detection, material misstatement Professional judgment, material misstatement, materiality judgments Inherent, detection, control

All the above

18. CIMAs code identifies five common threats:

A. Integrity, Self-review, Objectivity, Intimidation, professional behavior

B. Integrity, self-review, self- interest, Intimidation, professional behavior

C. Self-review, self-interest, Intimidation, Familiarity, Advocacy

D. Integrity, Intimidation, Familiarity, self-interest, Advocacy