Possible Exam 1 Questions - Forensics nn 15

Possible Exam 1 Questions - Forensics nn 15 - a. True b....

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Unformatted text preview: a. True b. False 26. Reactive auditing occurs when there are reasons to suspect that fraud may have occurred. a. True b. False 27. Proactive auditing occurs when there are reasons to suspect that fraud may have occurred. a. True b. False 28. Tests of controls may not be effective in detecting fraud, because management can override controls. a. True b. False 31. Pro forma financial statements refer to "as if" adjustments to financial information, moving them away from GAAP. a. True b. False 32. The trend in operating income is not as important as the trend in earnings. a. True b. False 33. The amount of stockholders or owners' equity should significantly exceed the amount of debt. a. True b. False 35. Inventory, sales, and receivables should move in tandem. a. True b. False 37. Reversing reserves is sometimes called "cookie jar" accounting. a. True b. False Page 15 of 44 ...
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