Kenton recently attended a professional development seminar on fraud. Armed with such knowledge and the...
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Accounting
Kenton recently attended a professional development seminar on fraud. Armed with such knowledge and the willingness to apply the what he has learned, he suggests that the issue of potential fraud might be worth investigating in this audit.
Indicate whether each of the following independent statements about fraud in True or False.
Fraudulent financial reporting refers to when assets are stolen
All management fraud discovered by the auditor must be reported to the audit committee
The existence of ineffective control or an ability to easily override existing controls is an example of an incentive to commit fraud.
An auditor is unable to provide absolute assurance of detecting fraud
The presence of all three of the general fraud risk factor would certainly indicate the existence of fraud
An auditor should give little attention to the existence of a material misstatement due to fraud, especially if the past and extensive experience with a client has not revealed fraud.
As the audit progresses and the auditor perceives the existence of fraud risk factors, she/he should design auditing procedures that are less predictable.
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