Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Chapter 2, Problem 15MCQ
To determine
Introduction:Opportunity is referred as situations that increases the opportunity for a perpetrator to commit fraud and reduces the risk of getting caught. Weakness in internal controls and complex transactions are the basic factors which increases the opportunity to commit fraud.
To identify:The option that represent an opportunity to commit fraud.
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Which of the following is not a purpose of internal controls?
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Chapter 2 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 2 - The Great Salad Oil Swindle of 1963 is an asset...Ch. 2 - Prob. 2TFQCh. 2 - The three elements of the fraud triangle include...Ch. 2 - Prob. 4TFQCh. 2 - Prob. 5TFQCh. 2 - Prob. 6TFQCh. 2 - Prob. 7TFQCh. 2 - Prob. 8TFQCh. 2 - Prob. 9TFQCh. 2 - Prob. 10TFQ
Ch. 2 - Prob. 11TFQCh. 2 - Prob. 12TFQCh. 2 - Prob. 13MCQCh. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Prob. 16MCQCh. 2 - Prob. 17MCQCh. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - Prob. 20MCQCh. 2 - Prob. 21MCQCh. 2 - Prob. 22MCQCh. 2 - Prob. 23MCQCh. 2 - Prob. 24MCQCh. 2 - Prob. 25RSCQCh. 2 - Prob. 26RSCQCh. 2 - Prob. 27RSCQCh. 2 - Refer to Exhibit 2.1 a. What is a Ponzi scheme? b....Ch. 2 - Prob. 29RSCQCh. 2 - Prob. 30RSCQCh. 2 - Prob. 31RSCQCh. 2 - Prob. 32RSCQCh. 2 - Prob. 33RSCQCh. 2 - Prob. 34RSCQCh. 2 - Prob. 35RSCQCh. 2 - Prob. 36RSCQCh. 2 - Prob. 37RSCQCh. 2 - Prob. 38RSCQCh. 2 - Many consider the Enron fraud to be one of the...Ch. 2 - Prob. 40RSCQCh. 2 - Prob. 41RSCQCh. 2 - Refer to Exhibit 2.5 and answer the following...Ch. 2 - Prob. 43RSCQCh. 2 - Prob. 44RSCQCh. 2 - Prob. 45RSCQCh. 2 - Prob. 46RSCQCh. 2 - Prob. 47RSCQCh. 2 - Prob. 48RSCQCh. 2 - Prob. 49RSCQCh. 2 - Prob. 50FFCh. 2 - Prob. 51FFCh. 2 - Prob. 52FF
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- Which of the following would a fraudster perceive as a pressure? A. lack of management oversight B. everyone does it C. living beyond ones means D. lack of an internal audit functionarrow_forwardWhich is NOT a source of fraud risk (from the Fraud Triangle)? a) Fraud Tip Hotline b) Perceived Opportunity c) Rationalization d) Financial Pressurearrow_forwardWhich one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errorsarrow_forward
- Which of the following combinations is a good way to conceal employee fraud but an ineffective means of perpetrating management (financial reporting) fraud?a. Overstating sales revenue and overstating customer accounts receivable balances.b. Overstating sales revenue and overstating bad debt expense. c. Understating interest expense and understating accrued interest payable.d. Omitting the disclosure information about related-party sales to the president’s relatives at below-market prices.arrow_forwardFraudulent financial reporting is most likely to be committed by whom? Select one: a. company management b. outside members of the company's board of directors c. employees of the company d. the company's auditorsarrow_forwardWhy is it important for companies to analyze revenue and accounts receivable? How can these areas lend themselves to fraud when left with lack of segregation of duties, weak controls and recordkeeping delays?arrow_forward
- One of the typical characteristics of management fraud isa. Falsification of documents in order to misappropriate funds from an employer.b. Victimization of investors through the use of materially misleading financialstatements.c. Illegal acts committed by management to evade laws and regulations.d. Conversion of stolen inventory to cash deposited in a falsified bank account.arrow_forwardQuestion: Which of the following statements accurately describes a fraud detection technique in accounting? a) Fraud detection relies solely on analyzing financial statements. b) Regular internal audits are unnecessary for fraud detection. c) Segregation of duties is an effective fraud detection measure. d) Fraud detection techniques do not require the use of technology.arrow_forwardIn accounting, which term describes deficiencies or flaws in the design or operation of internal controls that could increase the risk of errors, fraud, or misstatements in financial reporting? a) External audit b) Compliance review c) Internal control weaknesses d) Financial statement analysisarrow_forward
- Which of the following is desirable in a good system of internal accounting controls? Select one: O O O a. Develop plans and budgets b. Encourage employee collusion c. Maintain adequate accounting records d. Two of the above e. None of the abovearrow_forwardInternal control can only provide reasonable, not absolute, assurance of achieving entity control objectives. One of the factors limiting the likelihood of achieving those objectives is that A. The auditor's primary responsibility is the detection of fraud B. Management monitors internal control C. The cost of internal control should not exceed its benefits D.The board of directors is active and independentarrow_forwardOpportunity, is a fraud risk factor, that is within the control of the company. FALSE TRUEarrow_forward
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