Answer Each of the following (Either True or False)

1A)The external auditor discovered that Puritan Corporation (Puritan) has had no issues with fraud in the last 10 years. Despite Puritans favorable record on fraud, the external auditor continues to assess fraud risk at Puritan as part of the audit procedures. The fraud risk assessment is considered a relevant process by the external auditor.

True

False

B) The external auditors objective of testing internal controls is to ensure that the internal controls are operating efficiently.

True

False

c) The objective of performing substantive procedures is to evaluate the operating effectiveness of controls.

True

False

d) Advances in technology has made it possible for auditors to analyze an entire population of transaction data.

True

False

e) There is a strong likelihood of fraud if at least one of the three fraud factors are present.

True

False

f) The Chief Marketing Officer (CMO) of Petrias and Co. inadvertently decreased the marketing expenses in the fourth quarter of 2018 causing an increase in profits for the year 2018. The decrease in the marketing expenses was considered material. During an investigation, the CMO argued that this was a transaction error and not fraud. The CMO is accurate in her argument.

True

False

g) Materiality is determined using quantitative benchmarks but not qualitative benchmarks.

True

False