Often the auditor begins by making additional

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Often, the auditor begins by making additional inquiries of management and others. Use of Inquiry Inquiry can be an effective audit evidence gathering technique, as we discussed in Chapter 7. Interviewing allows the auditor to clarify unobservable issues and observe the respondent's verbal and nonverbal responses. Interviewing can also help identify issues omitted from documentation or confirmations. The auditor can also modify questions during the interview based on the interviewee's responses. 47.100/o Responding to Misstatements That May Be the Result of Fraud o 0, o o o () e. ffi Without hotline fffi witn nouine Account Reconciliation External Audit ffi z.zovo .o,ii,. 5.ggo7o Percent of Cases Source: Data {romthe 2010 Report to the Nation on Occupotional Froud ond Abuse, Association of Certified Fraud Examiners, 2010. Understand interview tech- niques and other activities after fraud is suspected. Fraud Detection Methods for Companies With and Without Hotlines @ tt.2oo/o Management Review ffi rnternar oro,, W 15.7oo/o 15.7Oo/o ByAccident ffiJ;:'- Wll.eoo/o @ ffi 6.500/o Document Examination G ,,::.i:..tll, 3.7oo/o ffi__^^. E Surveillance,/Monitoring Ef;&ffi /'5uu/0 iii' I '400lo Chapter I I / CONSIDERINC THE RISK OF FRAUD 575
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Inquiry as an audit evidence technique should be tailored to the purpose for which it is being used. Depending on the purpose, the auditor may ask different types of questions and change the tone of the interview. One or more of three categories of inquiry can be used, depending on the auditor's objectives. Categories of Inquiry An auditor uses informational inquiry to obtain information about facts and details that the auditor does not have, usually about past or current events or processes. Auditors often use informational inquiry when gathering follow-up evidence about programs and controls or other evidence involving a misstatement or suspected fraud uncovered during the audit. Auditors can most effectively use informational inquiry by posing open-ended questions about details of events, processes, or circumstances. An auditor uses assessment inquiry to corroborate or contradict prior informa- tion. The auditor often starts assessment inquiry with broad, open-ended questions that allow the interviewee to provide detailed responses that can later be followed up with more specific questions. One common use of assessment inquiry is to corroborate management responses to earlier inquiries by asking questions of other employees. Interrogative inquiry is often used to determine if the individual is being deceptive or purposefully omitting disclosure of key knowledge of facts, events, or circumstances. Often, interrogative inquiry is confrontational, given that subjects may be defensive, as they cover up their knowledge of specific facts, events, or circumstances. When using interrogative inquiry, the auditor often asks specific directed questions that seek either a "yes" or "no" response.
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