Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 6, Problem 28QRA
a.
To determine
Differentiate between fraudulent financial reporting and misappropriation of assets.
b.
To determine
Describe three conditions necessary for the commission of fraud along with examples of fraudulent financial reporting.
c.
To determine
Describe the three ways of response from auditors against fraud risks in the audit.
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Auditors should plan and perform their audits to provide reasonable assurance of detecting material misstatements in financial statements, including those resulting from fraud
a.Distinguish between fraudulent financial reporting and misappropriation of assets.
b. Describe the three fundamental conditions necessary for the commission of fraud. Provide an illustration of these three conditions for a case of fraudulent financial reporting.
c. Describe the three ways in which the auditors may respond to fraud risks in an audit.
Distinguish between the terms errors and fraud.
Distinguish between fraudulent financial reporting and misappropriation of assets. Discuss the likely difference between these two types of fraud on the fair presentation of financial statements.
Define fraud, and explain the two types of misstatements that are relevant to auditor’s consideration of fraud.
Accounting
Which of the following statements is true regarding the identification and
assessment of the risks of material misstatements by the auditor?
a.
As part of brainstorming activities, the auditor should identify
possible frauds that could occur.
Auditing standards require the auditor to identify and assess the
risks of material misstatement due to fraud at the assertion level.
Auditing standards require the auditor to identify and assess the
risks of material misstatement due to fraud at the financial
statement level.
d.
All of these statements are true.
Chapter 6 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Discuss what is meant by the phrase shopping for...Ch. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - Prob. 9RQCh. 6 - Prob. 10RQ
Ch. 6 - Prob. 11RQCh. 6 - Prob. 12RQCh. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15RQCh. 6 - What is meant by making a proper year-end cutoff?...Ch. 6 - Prob. 17RQCh. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - Prob. 20RQCh. 6 - Auditing standards require the auditors to have a...Ch. 6 - Prob. 22RQCh. 6 - Prob. 23RQCh. 6 - Prob. 24QRACh. 6 - Prob. 25QRACh. 6 - Prob. 26QRACh. 6 - Prob. 27QRACh. 6 - Prob. 28QRACh. 6 - Prob. 29QRACh. 6 - Prob. 30QRACh. 6 - Prob. 31QRACh. 6 - Prob. 32QRACh. 6 - Prob. 33QRACh. 6 - Prob. 34QRACh. 6 - Prob. 35QRACh. 6 - Prob. 36QRACh. 6 - Prob. 37QRACh. 6 - Prob. 38AOQCh. 6 - Prob. 38BOQCh. 6 - Prob. 38COQCh. 6 - Prob. 38DOQCh. 6 - Prob. 38EOQCh. 6 - Prob. 38FOQCh. 6 - Prob. 38GOQCh. 6 - Prob. 38HOQCh. 6 - Prob. 38IOQCh. 6 - Prob. 38JOQCh. 6 - Prob. 38KOQCh. 6 - Prob. 38LOQCh. 6 - Prob. 39OQCh. 6 - Prob. 40OQCh. 6 - Prob. 41OQCh. 6 - Prob. 42AOQCh. 6 - Prob. 42BOQCh. 6 - Prob. 42COQCh. 6 - Tracing from source documents to journals most...Ch. 6 - Vouching from journals (or ledgers) to source...Ch. 6 - For each definition (or portion of a definition)...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Tammy Potter, a new partner with the regional CPA...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- List two major characteristics that are useful in predicting the likelihood of fraudulent financial reporting in an audit. For each of the characteristics, state two things that the auditor can do to evaluate its significance in the engagement.arrow_forwardWhich of the following statements best describes auditors’ responsibility for detecting a client’s noncompliance with a law or regulation?a. The responsibility for detecting noncompliance exactly parallels the responsibility for errors and fraud.b. Auditors must design tests to detect all material noncompliance that indirectly affects the financial statements.c. Auditors must design tests to obtain reasonable assurance that all noncompliance with direct material financial statement effects is detected.d. Auditors must design tests to detect all noncompliance that directly affects the financial statements.arrow_forwardWhat is the primary objective of the fraud brainstorming session?a. Determine audit risk and materiality.b. Identify whether analytical procedures should be applied to the revenue accounts.c. Assess the potential for material misstatement due to fraud.d. Determine whether the planned procedures in the audit plan will satisfy the general audit objectives.arrow_forward
- SAS No. 99 (now PCAOB AS 2401) states that the auditor has the responsibility to plan and perform the audit to obtain reasonable assurance about whether financial statements are free of material misstatement, whether caused by error or fraud.SAS No. 99 also requires all of the following except: A. Obtaining the information needed to identify risks of material misstatement due to fraud. B. Preparation of a fraud prevention plan. C. Description and characteristics of fraud. D. Importance of exercising professional skepticism.arrow_forwardDefine fraud and explain the two types of misstatements thatare relevant to auditors’ consideration of fraud.arrow_forward
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