Research consistently shows that there are three elements present when most frauds occur. List these elements and at least three related fraud factors that may exist for each and briefly explain each.Hannah Montana is interviewing with public accounting firms to become an auditor. Hannah does not believe that fraud is a "big deal" in client organizations and argues that most individuals in management of companies are "honest people". She believes that auditors are becoming too cynical. Describe your response to Hannah's attitude and discuss the major types of fraud that occur in companies. The auditor assesses the identified fraud risks after taking into account an evaluation of the client’s programs and controls. How might the auditor respond to the results of the assessment of higher fraud risk?Discuss the auditor’s responsibility to communicate fraud to the audit committee. When is the auditor required to communicate possible fraud to parties other than the audit committee and management?

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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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Research consistently shows that there are three elements present when most frauds occur. List these elements and at least three related fraud factors that may exist for each and briefly explain each.
Hannah Montana is interviewing with public accounting firms to become an auditor. Hannah does not believe that fraud is a "big deal" in client organizations and argues that most individuals in management of companies are "honest people". She believes that auditors are becoming too cynical. Describe your response to Hannah's attitude and discuss the major types of fraud that occur in companies.
The auditor assesses the identified fraud risks after taking into account an evaluation of the client’s programs and controls. How might the auditor respond to the results of the assessment of higher fraud risk?
Discuss the auditor’s responsibility to communicate fraud to the audit committee. When is the auditor required to communicate possible fraud to parties other than the audit committee and management?

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