6. a. b. c. d. 7. b c. d. 8. a. Which of the following is most likely to be considered a risk factor relating to fraudulent financial reporting? Domination of management by top executives. Large amounts of cash processed. Negative cash flows from operations. Small high dollar inventory items. Which of the following is most likely to be presumed to represent a fraud risk on an audit? a. Capitalization of repairs and maintenance expense into the property, plant and equipment asset account. Improper interest expense accrual. Introduction of significant new products. Improper revenue recognition. Which of the following is not required by SAS No. 99,"Consideration of Fraud in a Financial Statement Audit? Conduct a continuing assessment of the risks of material misstatement due to fraud throughout the audit. b. Conduct a discussion by the audit team of the risks of material misstatement due to fraud. Conduct the audit with professional skepticism, which includes an attitude that assumes balances are incorrect until verified by the auditor. d. Inquiries of the audit committee as to their views about the risks of fraud and their knowledge of any fraud or suspected fraud. Which of the following need not be documented in relation to the auditor's consideration of fraud? Nature of communications about fraud made to management b. Procedures performed to obtain information to identify and assess risks of material misstatement due to fraud. Specific risks of material misstatement due to fraud that were identified. d. The assessed level of the risk of management override of controls. When the risk of material misstatement due to fraud is considered high in a particular area, which of the following is a likely response? a. Perform tests on an interim basis throughout the period. b. Obtain more reliable evidence by expanding tests to include all transactions. Obtain additional corroborative information. d. Design tests of controls to substantiate weaknesses. C. 9. a. c. 10. c