1-Which of the following aspects of the auditors consideration of fraud must be documented? A. The brainstorming discussion B. Specific risks of immaterial fraud discovered C. Nature of communications between senior management D. General risks related to identified fraud 2-After discovering fraud, the auditor may be required to inform all of the following EXCEPT: A. Management, if the auditor feels that the fraud is qualitatively material B. The SEC, if company management and the audit committee are informed of fraud but do not take action C. The media, if the auditor feels the fraud is material to the general public D. The board of directors, if the auditor feels management is responsible for the fraud

3- Which of the following scenarios is a prescribed method of obtaining a confirmation during a financial audit? A. The auditor prepares the confirmation and gives it to the client for inspection and mailing. B. The client mails the confirmation letter. C. The auditor returns the confirmation to the client after reviewing and inspecting it. D. The auditor includes with the confirmation a return envelope with the auditors return address.

4- Internal controls related to operational objectives are established to ensure all of the following EXCEPT: A. All valid transactions are captured and entered for processing on a timely basis. B. Functions are adequately segregated. C. Transactions are executed in accordance with authorization. D. Adequate physical control is maintained over assets and accounting records.

5-To increase the likelihood of detecting financial statement fraud, which of the following should be implemented? A. Oversight and guidance from middle management B. A tone at the top from the audit committee that evokes fraud deterrence C. An ethics committee D. An independent internal audit function

6. In a risk-based audit approach, auditors focus their resources on which area? A. Rotate areas each year B. Randomly select areas C. Areas of highest concern D. Areas requested by management