Question 31

3pts

The general type of fraud that involves some form of theft is typically known as _______.

Group of answer choices

fictitious sales

unrecorded liabilities

misappropriation of assets

improper asset valuation

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Question 32

3pts

The general type of fraud that involves intentionally misstating items or omitting important facts from the financial statements is typically known as _______.

Group of answer choices

writing checks to fictitious vendors

fraudulent financial reporting

theft of inventory by employees

using company cars for personal use

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Question 33

3pts

Which of the following is not a fraud risk factor?

Group of answer choices

Amount of ethics training provided by the company

Rationalization to justify fraudulent actions

An opportunity to commit fraud

An incentive or pressure to commit fraud

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Question 34

3pts

In the context of fraudulent financial reporting, which would most likely represent a risk factor?

Group of answer choices

Low employee turnover at senior management levels

Revenue expectations from management have increased slightly from the prior year

High degree of competition in the particular industry

The structure of the company includes subsidiary companies

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Question 35

3pts

When the economy is poor, a fall in profits can easily be explained to shareholders when most companies in the industry are also experiencing a decline in earnings; therefore, when the economy is poor, there is a tendency within an entity to _______.

Group of answer choices

maximize write-offs

maximize profits

minimize profits

minimize revenues

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Question 36

3pts

Analytical procedures are conducted during the risk assessment phase of the audit to ________.

Group of answer choices

highlight normal fluctuations in accounts

identify accounts at risk of material misstatement

aid in the elimination of risk

complete the audit work

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Question 37

3pts

Generally speaking, the existence of related party transactions ________.

Group of answer choices

increases inherent risk and should be investigated further

is not worth of further investigation

is illegal and should be reported to the Securities and Exchange Commission

decreases inherent risk and should be investigated further

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Question 38

0.5pts

It is management's responsibility to ensure that financial statements are fairly and truthfully presented.

Group of answer choices

True

False

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Question 39

3pts

Which assertion is common to both (i) classes of transactions and events for the period under audit and (ii) account balances at the period-end?

Group of answer choices

Completeness

Valuation and allocation

Rights and obligation

Classification

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Question 40

3pts

The responsibility of ensuring sufficient appropriate audit evidence is gathered to arrive at an opinion is ________.

Group of answer choices

the responsibility of the auditor

the responsibility of management

a function of internal control

a joint responsibility between management and the auditor