Question
3-29 Management fraud (e.g., fraudulent fi nancial reporting) is a relatively rare event. However, when it does occur, the frauds (e.g., Enron and WorldCom) can
3-29 Management fraud (e.g., fraudulent fi nancial reporting) is a relatively rare event. However, when it does occur, the frauds (e.g., Enron and WorldCom) can have a signifi cant effect on shareholders, employees, and other parties. SAS No. 99 (AU 316) provides the relevant guidance for auditors.
Required: a. What is the auditor%u2019s responsibility for detecting fraud? b. Describe the three conditions that are generally present when fraud occurs? c. What are the objectives of the %u201Cbrainstorming%u201D meeting that is held among the engagement team members? d. What is the required documentation for identifi ed risk factors?
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