ShatanaBentley-AC410-Auditing-Unit5-Homework - Unit 5...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Unit 5 Homework Template Name : Shatana Bentley (Use this template to answer your Unit 5 homework assignment. This template is provided to help guide you through the answer process and is organized in the way that I will grade your assignment. Your text box will expand as you type in your answers. You will notice that in some cases I have designated a word minimum. This is to encourage you to thoroughly explore and provide a complete answer. There are other responses where you need to provide a certain minimum facts for a complete answer <such as: at least 5 relevant items> you need to provide at least 5 relevant items for full credit. ) 9-56 (28.8 points) a) Describe the fraud risk factors that are indicated in the dialogue. ( Describe six risk factors. 20 word minimum for each risk factor) 1. Lack of segregation of duties in the cash disbursements departments, which could allow the clerk to write a check for anything, in other words internal control deficiencies. 2. Kent does not want to run the fraud risk assessment that Smith suggests, which could mean that Kent is trying to help someone at SCS hide something. 3. Mint the CEO of SCS has almost no salary, but gets mostly bonuses and stock options and told stock analysts that SCSs earnings will increase 30% the next year. 4. Too much power is given to Mint, the CEO of Computer Services Co which makes fraudulent activity much easier to commit. 5. The planning of the audit could be compromised due to Kent not being interested enough in the issue of fraud risk which could cause him to not take the steps necessary to prevent and identify fraud if it is present. 6. Jones tried to point out to Brown how ineffective the internal audit department was but was conveniently fired afterwards. Again this raises a red flag that fraud could be present. b) Describe Kents misconceptions regarding the consideration of fraud in the audit of SCSs financial statements that is mentioned in the dialogue. Explain why each is a misconception. (Describe six misconceptions. 20 word minimum for each risk factor) 1. Kents misconception is due to the fact that he isnt properly planning the audit because he is carrying the attitude that if they find fraud, he will deal with it at that point. He is lacking the professional skepticism that is needed to provide a questioning mind and a critical assessment that is needed for an audit....
View Full Document

This note was uploaded on 01/02/2012 for the course AC 410 taught by Professor Daniels during the Fall '09 term at Kaplan University.

Page1 / 5

ShatanaBentley-AC410-Auditing-Unit5-Homework - Unit 5...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online