38. The targeted fraud risk assessment approach assumes that there should be a direct relationship between the ________________ and the _________________________.

A. Specific industry involved; risk levels typically associated with that industry

B. Accounts receivable department; accounts payable department

C. Level of risk associated with a material weakness in the companys controls; amount of attention devoted to that area during an audit

D. Organizations tolerance for risk; implementation of appropriate internal controls

39. The text outlines a ten-step approach to implementing a targeted fraud risk assessment. Which of the following is NOT one of those steps.

A. Identify the process owner for each of the identified significant processes.

B. Identify the parties who have the ability to commit the potential fraud.

C. Identify specific vendors that have a reputation for fraud within the industry.

D. Identify, understand, and evaluate the companys operating environment and the pressures that exist.

40. Residual fraud risk includes those _______________ that are not adequately mitigated by control activities, and, as such, requires a fraud audit response.

A. Fraud schemes

B. Personnel

C. Industry norms

D. Company specific characteristics