14. Anchoring refers to 15. Which of the following would be a step in an internal control program? 16. If fictitious credit sales were recorded, and the fictitious accounts receivable were later directly written off as bad debt expense, 17. The idea of the cycle approach is to group accounts together by 18. An audit team uses the assessed risk of material misstatement to 19. Which of the following is not one of the four major cycles? 3- 2
Chapter 03 - Management Fraud and Audit Risk 3- 3
Chapter 03 - Management Fraud and Audit Risk 20. Looking at vendors' invoices for particular information is an example of 21. If an auditor were to use 7% of income before taxes as a basis for overall materiality, it would be an example of judgment based on 22. Which of the following is not a way in which auditors use the concept of overall materiality? 23. The auditor looked at a bank statement received and held by the client. This would be considered what kind of audit procedure? 24. In testing the existence assertion for an asset, an auditor ordinarily works from the 25. In determining whether transactions have been recorded, the direction of the audit testing should be from the 26. Auditors should design the written audit plan so that 27. An auditor assesses the risk of material misstatement because it 28. In designing written audit plans, an auditor should establish specific audit objectives that relate primarily to the 29. The risk of material misstatement differs from detection risk in that it 30. The risk that an auditor's procedures will lead to the conclusion that a material misstatement does not exist in an account balance when, in fact, such misstatement actually exists is 3- 4
Chapter 03 - Management Fraud and Audit Risk
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