Tutorial_5 - Tutorial 5 A: Multiple choice questions 1....

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Tutorial 5 A: Multiple choice questions 1. Because of the risk of material misstatements due to fraud (fraud risk), an audit of financial reports in accordance with auditing standards should be performed with an attitude of: (a) objective judgement (b) independent integrity (c) professional scepticism (d) impartial conservatism 2. Which of the following circumstances is most likely to cause an auditor to consider that material misstatements due to fraud exist in an entity’s financial reports? (a) management places little emphasis on meeting earnings projections of external parties (b) the boar of directors oversees the financial reporting process and internal control (c) significant deficiencies in internal control previously communicated to management have been corrected (d) transactions selected for testing are not supported by proper documentation 3. Which of the following characteristics is most likely to heighten an auditor’s concern about the risk of material misstatements due to fraud in an entity’s financial reports? (a) the entity’s industry is experiencing declining customer demand (b) employees who handle cash receipts are not bonded (c) internal auditors have direct access to the board of directors and the entity’s management (d) the board of directors is active in overseeing the entity’s financial reporting
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This note was uploaded on 07/31/2011 for the course MGMT 2027 taught by Professor Shak during the Three '07 term at Queensland.

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Tutorial_5 - Tutorial 5 A: Multiple choice questions 1....

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