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5. A difference between error and fraud is: a. Induction. c. Intent. b. Interest. d. Interpretation.

16. An employee steals, thinking others doing the same work receive more pay due to friendship with the boss, involves which aspect of the fraud triangle? a. Incentive. b. Opportunity. c. Rationalization. d. Optimization.

17. The term integrated audit means that the same CPA firm audits both the financial statements and the Internal Controls of a company whose stock is publically traded. a. False. b. True.

18. Consider audit risk model components in terms of whether they are assessed [i.e. they are what they are] or determined [i.e. the auditor can affect what the amount will be] by the auditor. a. Audit Risk is Assessed; Inherent Risk is Assessed. b. Audit Risk is Assessed; Inherent Risk is Determined. c. Audit Risk is Determined; Inherent Risk is Assessed. d. Audit Risk is Determined; Inherent Risk is Determined.

19. Regarding the Audit Risk Model, Detection Risk would vary how with Inherent Risk? a. Cumulatively b. Directly c. Exponentially d. Indirectly

20. The Risk of Material Misstatement is what components of the audit risk model. a. Audit Risk and Detection Risk b. Detection Risk and Control Risk c. Control Risk and Inherent Risk d. Inherent Risk and Audit Risk

21. Consider the following statements: I. A financial statement audit is based on procedures stated in Generally Accepted Accounting Principles. II. A trivial amount would be considered nonmaterial. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false

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