14)Fraud is more prevalent in large businesses than small businesses and not-for-profit organizations.A) TrueB)False Answer: BTerms: Fraud prevalence in organizations Diff: EasyObjective: LO 11-2AACSB: Reflective thinking skills15)The same three fraud triangle risk conditions apply to fraudulent financial reporting and misappropriation of assets.Objective: LO 11-2AACSB: Reflective thinking skills
16)"An attitude, character, or set of ethical values exist that allow management or employees to commit a dishonest act …." describes the opportunities condition included in the fraud triangle.Terms: Opportunities conditions included in fraud triangle Diff: ModerateObjective: LO 11-2AACSB: Reflective thinking skills17)An example of a fraud risk factor describing incentives/pressures is "ineffective board of director oversight over financial reporting."Objective: LO 11-2AACSB: Reflective thinking skills18)An example of a fraud risk factor describing opportunities is "ineffective board of director oversight over financial reporting."A) TrueB)False Answer: ATerms: Fraud risk factor describing opportunities Diff: ModerateObjective: LO 11-2AACSB: Reflective thinking skills19)Auditors should consider risk factors related to incentives, opportunities, and attitudes whenever they assess the likelihood of material misstatements due to fraud.Objective: LO 11-2AACSB: Reflective thinking skills
Learning Objective 11-31)Auditor's need to exhibit professional skepticism when auditing a client. This auditing standard is best expressed by which of the following?A) the auditor neither assumes dishonesty or honesty of managementB)the auditor assumes dishonesty of managementC)the auditor assumes honesty of managementD) the auditor assumes management lacks integrity Answer: ATerms: Professional skepticism when auditing a client Diff: ModerateObjective: LO 11-3AACSB: Reflective thinking skills2)SAS No. 99 requires auditors to document which of the following matters related tothe auditor's consideration of material misstatements due to fraud?Diff: Moderate Objective: LO 11-3AACSB: Reflective thinking skills
3)As part of the brainstorming sessions, auditors are directed to emphasize: A)
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