Part-1

1-Which of the following situations in the purchasing process creates the highest risk of fraud by making payments to a fictitious supplier?

• a) New supplier authorization in the purchasing system can be set up by anyone in the accounting department.

• b) Strong password controls exist so that only authorized purchasing department employees can gain access to the purchasing system.

• c) The system automatically conducts independent credit checks of new suppliers.

• d) The company has a comprehensive code of ethical conduct that all employees must sign.

• e) All supplier payments are made by electronic funds transfers.

2) A fraud warning sign for a business would be

• a) High respect for compliance with laws and regulations.

• b) A strong internal control system.

• c) A frequent number of significant difficult to audit transactions.

• d) Managers are highly reasonable and transparent.

3) How does an auditor decide which controls they are required to understand and test?

• a) An auditor is required by CAS 315 to understand and test all controls in an organization.

• b) It is a matter of the auditors professional judgement which controls, whether individually or in combination with others, are relevant to the audit.

• c) The auditor is responsible for testing all pervasive controls in an organization.

• d) The auditor conducts a random sample at the onset of the audit and selects controls depending on the results.

4) Internal control consists of many components. Which one of the components of internal control is closely related to accounting information and is referred to as "internal control relevant to the audit"?

• a) Monitoring of controls

• b) Control activities

• c) Control environment

• d) Management's risk assessment process

5) Fraudsters typically exhibit all of the following characteristics except

• a) Frequent eye contact.

• b) Irritability.

• c) Excessive sweating.

• d) Tiredness.

please answer all question above because this is one part question