QUESTION 31 The incentive to commit fraud as well as the opportunity to commit fraud are the most critical elements of the fraud triangle. True False QUESTION 32 The external auditor provides some level of advice to the company management as they prepare the financial statements. True False QUESTION 33 An example of reperformance is the audit procedure of reviewing shipping documents as evidence of the occurrence of sales. True False QUESTION 34 Influenced by bonus targets, the Head of Sales excluded significant sales return transactions from the financial statements. This is an example of fraudulent financial reporting. True False QUESTION 35 In the risk assessment phase of the audit opinion formulation process, the external performs appropriate test of controls. True FalseQUESTION 36 The previous external auditor of Samson and Co. (Samson) noted in the five years of auditing Samson that the company had a history of complying with investment laws. The assessment by the previous company is an indicator of a fraud risk factor. True False QUESTION 37 An external auditor made the decision to rely on evidence based on inquiry of management in place of existing documentary evidence. The auditor's decision to rely on inquiry in place of documentary evidence is a better approach to gain reliable information. True False QUESTION 38 Auditor competence is essential in conducting a quality audit. True False QUESTION 39 To keep detection risk levels at a high and audit risk at an acceptable level, it implies the inherent and controls may have been assessed at low levels. True False QUESTION 40 The auditor can be liable for gross negligence and fraud under the common law but not liable for ordinary negligence under the same law. True False