ch06Student: ___________________________________________________________________________1.Independent auditors of financial statements and fraud examiners approach their work differently. True False2.It is always good control to have the bookkeeper prepare a list of cash receipts and then have the bookkeeper record it immediately in the accounts. True False3.Fidelity bonds are used to prevent embezzlement. True False4.The use of confirmations for cash balances is still considered a generally accepted audit procedure. True False5.It is not necessary to send confirmations on accounts that a company represents as closed during the year to get the bank to confirm zero balances. True False6.The client should request the bank to send a cutoff bank statement directly to the auditor. True False7.Fraud consists of unintentional misstatements or omissions in financial statements. True False8.Fraud examiners are more interested in evaluating internal control weaknesses rather than strengths. True False9.Psychotic motivation is characterized by the habitual criminal who steals for the sake of stealing. True False10.Control systems enhance trust and reduce the bureaucracy of business. True False11.The most effective long-run prevention of fraud lies in the practice of tight management controls over people. True False12.The key to integrity in business is "accountability." True False13.Employee fraud generally involves people at the top executive level. True False14.An organization can prevent all fraud if its auditors are acquainted with some detection techniques. True False15.The chain of custody is the crucial link of evidence to the fraud suspect. True False16.Fraud awareness auditing includes "thinking like a crook" to imagine ways and means of stealing. True False17.Employee fraud is an intentional act that injures investors or creditors by leading to materially misleading financial statements. True False
18.The company's bank reconciliation (audited by independent auditors) is the primary means of valuing cash in the financial statements. True False19.One of the main requirements under GAAS relating to fraud in a financial statement audit is that auditors obtain evidence about the intent of the persons responsible for the fraud. True False 20.When auditing financial statements and finding indications of a possible misappropriation of assets, independent auditors should A. Investigate fully to determine the total amount of the misappropriation.B. Determine which accounts are affected and the amount by which they are overstated or understated.C. Determine the methods by which the misappropriation was carried out.D. E. All of the above. Identify a person(s) who are likely responsible for the misappropriation and obtain evidence about some other fraud indications in their work.
- Spring '12
- Cheque, Financial audit