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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Textbook Question
Chapter 4, Problem 31RSCQ
Refer to the Focus on Fraud feature “Moss Adams and the Meridian Mortgage Funds Fraud.”
a. Why was Moss Adams sued by the trustee for the bankrupt Meridian Mortgage?
b. What would the trustee have to prove in order for the courts to hold Moss Adams liable for damages?
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Chapter 4 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 4 - Prob. 1TFQCh. 4 - Prob. 2TFQCh. 4 - Prob. 3TFQCh. 4 - Prob. 4TFQCh. 4 - Prob. 5TFQCh. 4 - Prob. 6TFQCh. 4 - Prob. 7TFQCh. 4 - Prob. 8TFQCh. 4 - Utilitarian theory holds that what is ethical is...Ch. 4 - Prob. 10TFQ
Ch. 4 - Prob. 11TFQCh. 4 - Prob. 12TFQCh. 4 - Prob. 13MCQCh. 4 - Prob. 14MCQCh. 4 - Prob. 15MCQCh. 4 - Prob. 16MCQCh. 4 - Prob. 17MCQCh. 4 - Prob. 18MCQCh. 4 - Prob. 19MCQCh. 4 - Prob. 20MCQCh. 4 - Prob. 21MCQCh. 4 - Prob. 22MCQCh. 4 - Prob. 23MCQCh. 4 - Prob. 24MCQCh. 4 - Prob. 25RSCQCh. 4 - Prob. 26RSCQCh. 4 - Prob. 27RSCQCh. 4 - Prob. 28RSCQCh. 4 - Prob. 29RSCQCh. 4 - Prob. 30RSCQCh. 4 - Refer to the Focus on Fraud feature “Moss Adams...Ch. 4 - Prob. 32RSCQCh. 4 - Prob. 33RSCQCh. 4 - Prob. 34RSCQCh. 4 - Prob. 35RSCQCh. 4 - Prob. 36RSCQCh. 4 - Prob. 37RSCQCh. 4 - Prob. 38RSCQCh. 4 - Prob. 39RSCQCh. 4 - Prob. 40RSCQCh. 4 - Prob. 41RSCQCh. 4 - Prob. 42RSCQCh. 4 - Prob. 43RSCQCh. 4 - Prob. 44RSCQCh. 4 - Prob. 45RSCQCh. 4 - Prob. 46RSCQCh. 4 - Prob. 47RSCQCh. 4 - Prob. 48RSCQCh. 4 - Prob. 49RSCQCh. 4 - Prob. 50RSCQCh. 4 - Prob. 51RSCQCh. 4 - Refer to Exhibit 4.4. Briefly explain the seven...Ch. 4 - Prob. 53RSCQCh. 4 - Prob. 54RSCQCh. 4 - Prob. 55RSCQCh. 4 - Prob. 56RSCQCh. 4 - Prob. 57RSCQCh. 4 - Prob. 58RSCQCh. 4 - Prob. 59RSCQCh. 4 - Prob. 60RSCQCh. 4 - Prob. 61RSCQCh. 4 - Prob. 62RSCQCh. 4 - Prob. 63RSCQCh. 4 - Prob. 64RSCQCh. 4 - KPMG (LO 1, 2, 3) KPMG LLP served as the external...Ch. 4 - Prob. 66FF
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- Which of the following would be considered reasons for mortgage fraud? Select all that apply. Responses overstated your income overstated your income understated your debts understated your debts lied about apartment rental lied about apartment rental lied about employment lied about employmentarrow_forwardWhat is an example of rationalization as one of the three elements causing a person to commit fraud?arrow_forwardWhy would a financial institution’s PEP customers be required to provide documentation to evidence their source of wealth and/or income? In other words, what type of fraud would PEP clients more likely be associated with than the non-PEP customers? Why would they need to launder their money?arrow_forward
- Do some states allow creditors to engage in deception with the debtor to obtain the collateral if there has been a default? (Yes/No, deception is never allowed to be used by a creditor) Is a secured party allowed to be paid (reimbursed) for the costs of collection before it applies funds collected to the unpaid balance of a loan? (Yes/No collected funds must first be used to - pay off the debt owed to the creditor) If a debtor files for bankruptcy, does that stop any and all collection efforts of a creditor? ______ (Yes to unsecured creditors but no for secured creditors / Yes to all creditors, both secured and unsecured / No, bankruptcy does not affect a creditor's right to collection of an unpaid debt)arrow_forward1. What would the bank have to prove to successfully bring a lawsuit against K and Lee?arrow_forwardIdentify one specific type of accounting fraud. What damage does the perpetration cause? What could be done to prevent it?arrow_forward
- How is net worth analysis used to prove fraud?arrow_forwardCritically elaborate on any four (4) implications of credit card fraud? Who pays for credit card fraud? Where does credit card fraud generally occurring?arrow_forwardAsap When working with a client or customer, salespersons must be vigilant about mortgage fraud and help prevent potential fraud.Which of the following woud NOT be a corect step to deter mortgage fraud?0Select one answerO.a) Ensure client s free and dear and there are no liens on the property prior to making an unconditional offerO.b) Verity identification and know your clientsO.c) Advice a buyer to provide a depost to a lawyer or real estate brokerage. and ensure tis held trustO.d)Provide copies of the Agreement of Purchase and Sale to the lender or the appraiser to ensure the correct version of the agreement is being usedarrow_forward
- Which of the following statements is incorrect? A A bank providing a loan to the entity is not a related party transaction. An entity should neither accrue nor disclose when it cosigned a mortgage note on the home of its president B guaranteeing the indebtedness in the event that the president should default. The entity considers the likelihood to default to be remote. Post-employment benefit is part of the compensation of key management personnel. An entity is not required to disclose if it has a common director with another entity.arrow_forwardBriefly explain what is meant by the risk of ‘Fraud in Revenue Recognition’ Is there always a presumed risk of ‘Fraud in Revenue Recognition’? Explain your answer (c) Explain 4 Fraud Risk Factors that may heighten the risk of fraudulent financial reporting or misappropriation of assets. Answer in the table below: Risk Factor 1 2 3 4arrow_forward
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