Question
1.It is managements responsibility to ensure that financial statements are fairly and truthfully presented. True False 2.Generally speaking, the existence of related party transactions ________.
1.It is managements responsibility to ensure that financial statements are fairly and truthfully presented.
True
False
2.Generally speaking, the existence of related party transactions ________.
-decreases inherent risk and should be investigated further
-is illegal and should be reported to the Securities and Exchange Commission
-is not worth of further investigation
-increases inherent risk and should be investigated further
3.Analytical procedures are conducted during the risk assessment phase of the audit to ________.
-aid in the elimination of risk
-identify accounts at risk of material misstatement
-highlight normal fluctuations in accounts
-complete the audit work
4.In the context of fraudulent financial reporting, which would most likely represent a risk factor?
-Low employee turnover at senior management levels
-Revenue expectations from management have increased slightly from the prior year
-High degree of competition in the particular industry
-The structure of the company includes subsidiary companies
5.Which of the following is not a fraud risk factor?
-An incentive or pressure to commit fraud
-An opportunity to commit fraud
-Amount of ethics training provided by the company
-Rationalization to justify fraudulent actions
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