Scribd Logo
Hochladen

Willkommen bei Scribd!

  • Fraud and Noncompliance PDF

    Hochgeladen von

    Ashley Levy San Pedro
    19 Ansichten6 Seiten

    Originaltitel

    Fraud and Noncompliance.pdf

    Copyright

    © © All Rights Reserved

    Verfügbare Formate

    PDF oder online auf Scribd lesen

    Stufen Sie dieses Dokument als nützlich ein?

    Sind diese Inhalte unangemessen?

    Dieses Dokument melden

    Copyright:

    © All Rights Reserved
    Als PDF herunterladen oder online auf Scribd lesen
    Markieren Sie unangemessene Inhalte
    19 Ansichten6 Seiten

    Fraud and Noncompliance PDF

    Hochgeladen von

    Ashley Levy San Pedro

    Copyright:

    © All Rights Reserved
    Als PDF herunterladen oder online auf Scribd lesen
    Markieren Sie unangemessene Inhalte
    von 6
    ‘Module 2: Fraud and Noncompliance Multiple Choice {dently the eter ofthe choice that best completes the sratement or ansirers the question, 1 When the auctor ientiies a misstatement inthe nancial statements en Elanning te aud, the auditor shout! nae Inquiries of mmanagemnt. Such inquiries the folowing, except 2. Management's proces fr identifying ai’ responding to te rks of Ireud inthe eny, 1b Management's consideration of hew an e ement of unpredetabity wl be incorporated into the nature, ining, and extent ofthe audit procedures to be pertermed. §, Nanagement’s assessment ofthe risk thatthe financial statements may be misstated due to fraud. Management's communication, if any. To those charged with gaverance ragarding is procestes [or 'dentving and cesponding tothe risks of fraud inthe ety i access Dk 260 reauires the audor to determine the relevant persons who are charged with gowerneace and with ‘shor audit matters of governance interest are carnmunicate. For Corporations averes bythe see coe of Corporate Governance, which ofthe following is primary response for corporate sovarseree? 8. Board of Directors crescent b. contotler 4. Manajement ‘urs of financial statements are designed to obtain assurance of detecting material misstatements due to (eros (2) fraudulent financial reporting 4) miseppropration of assets 2. yes, yes, no yes, yes, yes b. yes, mo, yes m0, yes, 00 2uditor should consider whet {02h 8 misstatement may be incleatve of Fat cand thesis such on ieicaion, the aushior shealo 2. Gonmriente the information to regulate and enfercement author ', Witerow from the engagement Consider the implications ofthe misstatement in relation lo olheragpcs ofthe audit 14. Report te matter tothe person or persors who mad the aut ppamtment “what aiferentiates aus from an enor? a. Materia Frequency of occurence fect on misstatements 6. Intent ‘nuda should recognize that the applcatin of auditing pracedures my produce evant! matter ‘ndating the possibilty of erors and regulates and therefore should 3. extend the work to aut most recorded transactions snd records nf 2 en. bs design avait tests to detect unracorted trinsacions & plan and perform the engagement with a attitude of professional ke pic. 4: not depend on interna accounting control features that are designed ‘prevent and detec erors or regulates, ‘When the auditor becomes avare of information cancernvg @ posalbe instance of noncompliance, the ‘dor should obtain an understanding f |. The nature ofthe act I. The crcumetances in whieh thas occured fil Sufelent ot er information to evalute the possible effect an Fnancat 3. Yes, Yes, Yes No, No, Yes 1. No,"ves, Yes Yes, 0 ‘nich of the following statements relating to communication of audit maters of goveman: ‘Audit matters of governance interest ince only those malters that fave come to the attention of the autor asa result of the performance othe aut , The auditor should Wnty relevant persons wh are charged wth governance nl ith whom terest s _uiit matters of governance interest are to be communicated In an auat in accordance with PSAS, the auctor should design auc procedures forthe specif purpose of Identifying matters of governance Interest 4. Th-auditors communications with those charged with governance may be made orally or in wring 5 According to PSA 260, those,matters that arse from the aut of facial statements and, othe opinion of the auctor, are both important and relevant to those charges with goveinance in overseing the franc! reporting and dielosure process are ralled 2. Ault matters of governence interes! 2. Siniicant ace matters Autor’ fivings 4. Material misstatements inthe nnn statements 10. Under PSA 260, this term s used to cescribe the role of persons entrusted withthe supervision, contol, and ‘rection of an entity. 3. Contiot Oversight 1b Governance 4. Direction 11. The folowing statements relate to communication of misttaterents rest hing frm faud to management and to those cherged with governnce. Which is ‘ase? 2. ‘It the aucitor has identified @ fraud, whether or not results Ina meterial misstatement the financial statements, the audtor should communicate these matters tothe af propriate lave of management on 8 timely basis, and consider the need to recort such matters to tose charged with governance bh. The auditor need not bring tothe attention of those charged govern nce any material weaknesses in Interal contol related tothe prevention and detection of fraud. © Ifthe auditor has obtain evidence that indicates that fraud may est (even f the potential eect on the ‘nancial statements would not be material), the autor should com urieatstheee matters the appropriate level of management ona tnely bass, end consider the need to report sich matters ta those charged with governance 4. The aucitor’s communizaion with thse charged with governance may be made orally or in wring 12, The fllowing ere contons that noncompliance may have occured, ex ent 2. payments without proger exchange contro documentation, 1. financia pressure ontop managers ‘&_Dayments For unspeced services or loa to consultants, relate partes, employees or goveenment employees. 1. purchasing ot prices signicantly above cv below market price 13. When planning and performing aut pencedies and eveluating and rep tng the results Uiereat the aur shoud ‘2 search for fra that would have a nae effect and for erors tha’ would have either matrial er ‘rnmaterial effects onthe Nnancelstater sents 1. consider the sk of material misstateretts inthe nancial statemenis resulting fom fou, search for enor that would have a material effec and for feud the. woud have eer mater immaterial effects on the nancial statements @. conser the sk of misstatements inthe fnanciel statements result og fom fous. 14, If the auctor precluded bythe entty tro obtaining suficent appropiate audit evidonce to evaluate wether nancomplence that may be materi! tothe Mnancil statements, as, orl ely to have, occured, the aud should express a, A qualified opinion or 8 declaimer opinion tn adverse epinon ‘A qualifed opinion or an adverse opnior 1. An adverse opinion or a disclaimer ef op rien 15. Misstatements inthe nancial statements cay arse from fraue or error. The distinguishing factor betwean Fraud and errors whether the underying acon that resus Ie the misstatement offical statements I {Voluntary or involuntary Planned or unplanned 1. Simple or complex Intentional oF unintentional ‘ich ofthe flowing conctions or events nay create inentives/pressres ta commit feud? 2. Lack of mandatory vacations ‘ro employses performing Fey contol functions +. Excessive pressure on management or eperating personne to meet Tnancil targets estabied by those charged with governanen, inchsing sales o profitability incen ive goais &Tnadaauate system of authoraaton and approval of transartons 2. 2. 1d. Inadequate access controls ever automated records ‘When the auctor encounters crcumstances thet may indicate that there fi 2 material misstatement in the financial statements resulting from fraud or eror, the auctor should perfcrm procedures to determine Winther the financial statements are material misstated, The nature, ting, ane extent ofthe procedures to be performed depend onthe auto's judgment ast the I Type 0 raus o¢ enor indented fi. Uketnood of occurence 1G, UkelIned that a particular type of fraud or erro cui have ‘material effect on the financial statements 3. Yes, Yes, Yes No, No, No Lo, ves, Yes YES, NO, No Because ofthe risk of materia! misstatement, an aust of franca statenxnts In accordance with PSAs should be planned and performed with an attitude of 2, Impartial conservatism Objective judgment 5. Professional stentcism 4. Independant ineariy ‘According to PSA 250, the tenn "poncompllance” as use inthe standards refers to acts of omission or cmmission by the ety being audited, ether intentional or unintentional, which are contrary to prevailing Jaws or regulations. Such acts co nat include 4. Transactions encered inta in the name of the entity , Transactions enterec into on the entity's behalf by is management or employees Transactions entered into by ent. . Personal misconduct (unrelated tothe entty’s business actives) by the entiy’s manageent or lempoyees ‘The folowing are examples of error, except 2. an ncartect accounting estimate arising frm oversight or misnterreation of facts, 2 mistake inthe application of accountng principles relating to measyement, recognition, casscaion presentation, or disclosure, {a mistake in gathering or processing data fram which Snancis statements are prepared. 4, misrepresertation in the franca statements of events, transactions, or other Scent information Wich statement i incorrect regarding the au to's respovsblty to consider fraud and eror ina aut of financial statements? 2, The auditor should design tests of contol to reduce te an acceptably ow level the risk that tnistatementsresuitng from fraud and eror that are mater tothe nancial statements a§ @ whole Will not be detected, . In planing the aud, the suitor ehould scuss with other members of the suc tea the susceptibility ofthe entity to materia mis‘atements I the Mhancal statements rutin fom fur The auditor isnot and cannot be held resjonsible forthe prevention ¢ fraud and ior 6. Allof the three other choees, Wich of the falling should the aude ha to do when the apicaior of panned aust procedures Indicates the possible existence of fraud or enor? 2. He should discus the matter vith the perzon wham Hs believes is invalved withthe ivegulrites. He stould consider the potential effect on he financial stalements, (The auditor shoud resign inorder to avo legal responsibly, . ‘He should caer the suspected fraud or enor. the internal aur ‘The term "rau refers to an intentional act by one or mere inviguals arnong management, those charged vith governance, employees, or third parle, Ivelvig the use of decetizn to obtain an unjust or legal advantage, Which statement correct regarding fraud? 13 Mietatement of te fnencal states rany ot be the obJectve Of some rau 8. Frous involving only employees of the enty is referred to as management fraud _Auctors make legal determinations of whither fraud has actualy ove re, 1d. Frau involving one or mare members of management or thse charged with governance is referred to as "empoyee frau” 2. 28. 2. 2. aL ‘Which ofthe fllewing concltions are generally aresent wher misstatement: due t rad occur? Leincentve IL. Perceved opportunity TIL. Rationalization a and i only cc L.Hand Ut Pana tt only 4. Mand T only Fraudulent financial reporting involves intentional misstatemants Inclung onsstons of arnounts oF lsclosures in financal statements to deceive Sharcal statement users, It riay be accomplised n 2 number ot ways, nelding |. Manipulation, fenton, or alteration of accounting records or suppoting documentation trom wich the financial Statements ae prepares fb. Emberaing receipts Using an entity's assets for personal use Stealing physical assets or intllectua! property “Which ofthe folowing best describes whats meant by the term “fraud ris factor"? Factors whose presence often has been observed in cumstances where frauds have cccured, 15 Reportable condtions identifies during an oud ators whose prasence requires modfeations of planned aut procecres 4. Factors whose presence Indicates that the isk of fraud Is high Based on PSA 240 Redafted, ina nancial statement aud. the autor should consider categories of frau "sk factors relating to misstatements arising from (1) fraudulent financial raporting, and (2) misappropriation Df assets. Which ofthe following s nt a category of Fraud risk factors in elation to misstatements arising from misaporepriation of assets? 3. Convels Pressures / incentives . tite /rationaiations 4, Opportunities “The auditor is concerned wth fraud that causes a material misstatement ir the facial statements, There ‘2t0 bo types of Intentional misstatements tha are relevant to the auctor misstatements resulting from Traudulent nancial reporting and misstatements cesuing trem a. Misappropriation of assets Colston within the entity or with third parties Management fraud dd. Empiayee fraud 5A 230 (Documentation) requires the auditor to document matters which are important in providing ‘evidence to suppert the aust opiion, and staves thatthe working papers include the audtors reasoning on al sgntizant matters which require the auity’s judgment. together with the auto's conclusion the ‘nich ofthe following should be documented by the audtar? 2. Froud risk factors Wentifed as being presen! during the auctor’ isk assessment process b. Auditors responses to dented fraud risk factors €._ The standare does nat require dacumenta:ion ofthe klentiad fraud sk factors and the auctoy’s responses to them Both feud rise Factors identified as being rmezent during the auctor’ sk assessment and the auditor's response t any such factors “The flowing are examples of risk factors relating to misstatements arisn3 from misappropriation of essets ‘under “attudesationalzations” category, e:ept - ‘a cisregard for internal control over misappropriation of assets by averrdng existing controls or by fang to correct known internal contol deiclences. b, isegard for the monitoring oF reducing # sks related tothe misappro.raton of assets. €._‘nenavior indicating. disslaasure or cist sfaction sath the entry ot eatment ofthe employee. inventory tems that are smal in siz, of high value, ori high deman ‘A auditors responsibilty to detect egal act: that have 2 direct and mataria effect on the nancial Statements isthe sme 2s tat for erors and wreaulaniies. ‘One reason why the auditor's examination cain reasonably be expect to bring an llega act bythe cent tothe austor’s attention i that egal ats by clients often relate to opeiting aspects rather than accounting records. False, Te Both statements are irue. b. Tre, False J. Both statements are false 2, 56. ‘urting stendards require that aualtors be aware of relevant fectrs relting to fraudulent Financial porting, ‘which ofthe folowing statements i false concerning fradulent reporting? 2. An aust rarely involves the authentiaticn of docuretaton; thus, f aud may go undetected by ustor. . Fraud involves actions of management but excudes the actions of employees or third parties. (6 Two types of fraud relevant tothe aut Include material misstaterients arising for fraudulent financial refesting and material misstatements ering from misappropriation asses 4, Fraud frequently invoves 9 pressure or en incentive vo cont raud and a perceived oppartunty fo 0 \hich statement is incorrect regarding the autor’ consideration of laws and regulations in an auc of Franca! seatements? 2. The auditor may withdraw from the engagement wien the ently do2s not take the remedial action that the auctor considers necessary inthe ccumstances, even when ths noncompliance i act material to the Ainancial statements b, The auditor shall document Kents or suspected rancomipiance with laws and regulations and the ests a discussion with management, where appcabla, tase cha ged with governance end other Dares outside the entity ‘cWhen the auditor becomes ware of information concerning a possinle Instance of rancomplance, the {ust should evaluate the possible effect on the financial stateres ts. «Ifthe auditor concludes thatthe noncoryplanee has a mateial eect on the financial statements, anc has not been propery reflected inthe financial statements, the suitor should expres 3 qualifles opinion or 3 clisclaimer of opinion. “The types of intentional misstatements are: 1, Mistateronts resulting from fraudulent financial reporting, 1i, Misstatements resulting from misappropration of assets a. Lenly Netter L nor 5 b. bandi 4 Mon “The flowing ate examples of rik factors relating ta mestatements arising from fraudulent financial reporting under "eppertunty category, ot ‘en fnancil management's excessive participation In cr prenccupalion withthe selection of accounting policies or the determination of significant estimates. . igh turnover of senior management, lal counsel, or those charard with governance. (domination of management by 2 singlz2ersan or smal group (in 2 nan owner managed business) without compensating controls. 4. sgnfcant related party transactions not inthe orirary course of bsiness or with related entitles not ‘audited or aucted by anater frm Wich ofthe folowing characteristics most lel would heighten an auto's concern about the risk of ‘materal misstatement arising from fauulent Mhancialyeporting? 1. Low turnover of senior management, leel counsel, or thse charged with governance Excessive interest by management i in-reasing stk price or eam ngs trend through agoressive 2ccounting practices. ‘c Management is dominated by a single carson or 8 smell group with compensating controls such as affective oversignt by those charged win governance. 4. fective accounting and internal conte! systems, Fraudulent nancial reporting inves intr tonal misstatements or om sions of amounts or sclosuire inte Financial statements to deceive Mnancil statement users. Fraudulent Vnancal reporting feast kay involve 8, Intentional misapplication of accounting principles ralating to measurement, recognition, dassication, presentation, ar ascosure vezziing tenis, stealing physical or Intangible assets, or causing an entity te pay for goods and Semces nat eased, {&_misrepresentaton in, oF Intentional omission from, Uhe Fania tarements of events, transactions, or ther sigmfcant information. 1. deception such as manipulation, falcfestion, or alteration of acou ting recor or supporting documents from whch the financial statements ae prepared. [whit ofthe folowing isa false statement concerning frau? 2. Froud generally involves incentive or peessute to comm raud, a rercived opportunity te aso, and some fatonaization of the act Fraud involves actions of management but excludes the action of emoyees or third parties C_Two types of misstatements relevant tothe autor Inde material mistatements arising fom favdiiest nace reporting and material nssatements arising fom risappropiation of assets dd, An audit rately involves the authenteaton of documentation; thus, fat d may go naetectes by the avdtor 39. Under which ofthe Greumstances bela would the auditor corcide that withdrawal from the engagement I necessary? the louior is unable to determine whether noncomplence hes occur because of itetons imposed by the ereumstances rather than by the ent. b, The nusitor i preladed bythe entity trom obtaining sufficient appropriate aut evidence to evaluate “iether noncompliance tht may be materia othe nancial statements, has, or is Heely to have, Secured.

    Das könnte Ihnen auch gefallen