ch04 - ch04 Student 1 Frauds are unintentional misstatements or omissions of accounts or disclosures in financial statements True False 2 The nature of

ch04 - ch04 Student 1 Frauds are unintentional...

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ch04Student: ___________________________________________________________________________1.Frauds are unintentional misstatements or omissions of accounts or disclosures in financial statements. True False2.The nature of extended procedures for fraud detection is limited to those listed in the Professional Standards and Practices for Certified Fraud Examiners. True False3.Fraud consists of knowingly making material misrepresentation of fact with the intent of inducing someone to believe the falsehood and suffer a loss. True False4.Audit care and attention should be greater where business and inherent risks are judged to be lower. True False5.Control risk should not be assessed so low that auditors place complete reliance on controls and do not perform any other audit work. True False6.Detection risk occurs when internal control activities fail to detect material misstatements. True False7.The auditing profession official standard for an acceptable level of overall audit risk is 0.05 at the current level. True False8.Audit risk (AR) is a quality criterion based on professional judgment. True False9.The audit risk model assumes that elements of audit risk are independent and therefore multiplicative. True False10.Generally, fraudulent financial statements show financial performance and ratios that are better than current industry experience. True False11.The demographics of white-collar criminals are similar to those of typical bank robbers. True False12.Knowledge and understanding of a client's business is absolutely essential in completing an audit. True False13.Auditing standards require that analytical procedures be applied in the beginning stages of each audit. True False14.Auditors look for relationships that do not make sense as indicators of problems in the accounts and use such indicators to plan further audit work. True False15.Analytical procedures are considered to be "soft" evidence and therefore considered ineffective. True False16.Audits are not designed to detect material errors and fraud in financial statements. True False
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17.Knowledge of the client's business from preliminary analytical procedures can help auditors identify problem areas and make broad risk assessments. True False18.The major emphasis in GAAS related to consideration of fraud in a financial statement audit (AU 240) is on: A. Employee misappropriation of assets.B. Management fraud.C. Client fraud on customers.D. Employee embezzlement.
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  • Spring '12
  • janigrt
  • Financial audit

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