QUESTION 22 Match the term on the left with the appropriate definition or description on the left. A. A requirement of the Sarbanes-Oxley Act B. A group of measures intended to reduce or detect fraud C. A framework for assessing the rísk of fraud D. The set of accounting rules that publicly traded companies must follow v Fraud triangle v Audited financial statements v Internal controls v Segregation of duties E. One specific measure taken to reduce the opportunity for fraud v Cerified Public Accountant F. A licensing requirement for auditors of public firms v GAAP

QUESTION 22 Match the term on the left with the appropriate definition or description on the left. A. A requirement of the Sarbanes-Oxley Act B. A group of measures intended to reduce or detect fraud C. A framework for assessing the rísk of fraud D. The set of accounting rules that publicly traded companies must follow v Fraud triangle v Audited financial statements v Internal controls v Segregation of duties E. One specific measure taken to reduce the opportunity for fraud v Cerified Public Accountant F. A licensing requirement for auditors of public firms v GAAP

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 9 Fraud risk factors are events or conditions that indicate which of the following? An opportunity to carry out fraud An attitude or rationalization that justifies a fraudulent action. An incentive or pressure to perpetrate fraud. All of the answers provided.
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C. Give an example and explain securities fraud in violation of the Securities Act of ‘33. D. Explain how Enron “cooked the books” with two of its accounting practices
Ma2. According to American Institute of Certified Public Accountants (AICPA) auditing standards,2 the primary responsibility for prevention and detection of fraud rests with those charged with governance and management. There are a number of strategies3 to help management and public officials navigate the challenges associated with prevention and detection of fraud. Explain some other fraud prevention methods in which it can be avoided?
Question 4 The auditor of a large public company has determined that a material weakness exists in the client's internal controls over financial reporting. Which of the following statements is true? Weakness require an adverse opinion on the financial statements taken as a whole. The auditor should express an adverse opinion on internal controls only if a material misstatement was found in the financial statements. The auditor should express and adverse opinion on internal controls even though no material misstatements were found in the financial statements. The auditor is not required to express an opinion on internal controls.
Should the SEC take tolerance on a company that recognizes and reports accounting irregularities and other frauds of the company?
Which of the following is not a Sarbanes-Oxley Actrequirement intended to reduce fraud opportunities?a. Increase fines and jail sentences for fraud perpetrators.b. All public companies establish an audit committee ofindependent directors.c. Management of all public companies evaluates andreports on the effectiveness of internal control overfinancial reporting.d. External auditors of large public companies evaluateand report on the effectiveness of internal control overfinancial reporting.
7 Concerns about bank solvency has been used to justify product segmentation on the grounds of A) Deposit insurance issues B) Conflict of interest issues C) Safety and soundness issues D) Economy of scale and scope issues E) Regulatory oversight issues
Question 13 According to ISA (UK) 580, Written Representations which TWO of the following must auditors obtain written representations about? A That the financial statements record and reflect all transactions B Material matters where other evidence is missing due to an emergency such as a fire or theft C The company's ability to continue as a going concern D Material uncertainties such as provisions where evidence is hard to obtain
The concept of adequate disclosure continues to be one of the most important issues facing accountants. Disclosures are also necessary to the public for their protection against fraud when securities or stocks are offered to the public for sale. Disclosure requirements for the financial statements are covered in: a. IAS 36 b. IAS 7 c. IAS 1 d. IAS 3
41 Who among the following are secondarily responsible for prevention and detection of frauds? a. Auditor is secondarily responsible for prevention and detection of fraud b. Management is secondarily responsible for prevention and detection of fraud c. All the options d. Nomination committee is secondarily responsible for prevention and detection of fraud
10. Finding fraud is one of the major responsibilities of an auditor on the audited financial statements engagement. Question 10 options: a) True b) False