Question 6 (Mandatory) (1 point)

Which of the following is not an inherent risk factor?

Question 6 options:

	Management is compensated based on stock price appreciation.
	Accounting policies related to revenue recognition are complex.
	Significant increases in product defect rates.
	Whether or not a misstatement allows the company to meet an earnings target.

Which of the following is indicative of increased risk of fraudulent financial reporting (FFR)?

Question 7 options:

	The Audit Committee of the Board of Directors is heavily involved in the financial reporting process.
	Financial analysts have forecasted strong EPS for the company in the next three consecutive quarters.
	High-level management is compensated with base salaries alone.
	The company's accounting policies require little interpretation or the exercise of judgment by management.

Question 8 (Mandatory) (1 point)

Auditing Standards require auditors to perform analytical procedures for risk assessment. The level of detail used to perform analytical procedures for risk assessment is the same as that used to perform analytical procedures to detect material misstatements.

Question 8 options:

	True
	False