Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal controls in the revenue cycle?       a. Fictitious transactions may be recorded that cause an understatement of revenues and overstatement of receivables       b. Claim received from customers for goods returned may be intentionally recorded in other customer’s accounts.       c. Authorization of credit memos by personnel who receive cash may permit the misappropriation of cash       d. The failure to prepare shipping documents may cause an overstatement of inventory balances

Q: t that the client might be making duplicate payments to vendors. The risk that the client’s…

A: Auditing refers to the process of tallying all the transactions of a company by physically checking…

Q: Confirmations of bank accounts may help the auditor to determine if material amounts of accounts…

A: An auditor is a professional, frequently an independent third party, who examines and verifies…

Q: Why are receivables and revenue ripe areas for abuse or outright fraud? Income tax rules have been…

A: Receivables and revenue are ripe areas for abuse or outright fraud as no real event such as actual…

Q: Which of the following are financial statement frauds? Select which three options are correct. A.…

A: Financial statements frauds involves intentional misapplication of accounting principles related…

Q: Why must auditors distinguish between fraud committed by employees and management?  Are auditors…

A: It is one of the auditor's responsibility to obtain reasonable assurance that the financial…

Q: Consider how an organization must manage cash and receivables. Which of the two is the most…

A: How an organization must manage cash and receivables? Cash and receivables management is important…

Q: In a single-entry system, what financial aspect is challenging to detect due to its limited…

A: Single entry system is simple as compared to double entry system as it records only a single aspect…

Q: Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive…

A: Financial statement fraud refers to the intentional manipulation, misrepresentation, or…

Q: An auditor most likely would limit substantive audit tests of sales transactions when control risk…

A: Auditing is a process where by the financial statements are audited in order to check fraud or error…

Q: Which of the following does not demonstrate internal control practices? a. Allowing access of…

A: Internal control is a set of measures instituted by management and designed to help. achieve the…

Q: Which is NOT a source of fraud risk (from the Fraud Triangle)?  a) Fraud Tip Hotline b) Perceived…

A: According to the Fraud Triangle, all three elements - opportunity, motivation or pressure, and…

Q: Evidence comes in various types and has different degrees of reliability. Below are some pairs of…

A: The auditors are professional who possesses accounting, auditing, and taxation expertise. The…

Q: Which of the following could signal internal control problems within the accounting system? (1)…

A: Internal controls are the systems, rules, and strategies executed by an organization to guarantee…

Q: Which of the following is not a purpose of internal controls?     Guarantee profits     Protect…

A: Internal control can be defined as a system to follow the rules and mechanism in the organisation so…

Q: Petty Cash is easily misappropriated if business processes and internal controls are not established…

A: Petty cash means the cash allocated to meet small day to day expenses of the business. If proper…

Q: An auditor tested the client's internal controls over granting customers credit and establishing…

A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…

Q: Question: Which of the following statements accurately describes a fraud detection technique in…

A: Fraud detection techniques are  styles, procedures, and instruments used by  individualities,…

Q: Which of the following procedures would most likely be performed during planning?a. Surprise…

A: Identifying related parties would most likely be performed during planning.

Q: An auditor wishes to perform tests of controls on a client's cash disbursements procedures. If the…

A: a. observation and inquiry.In auditing, when control activities leave no audit trail of documentary…

Q: Describe the difference between errors and fraud in financial statements.

A: Definition: Auditor: The auditor is an accounting professional hired by a company to review the…

Q: What role does internal control play in ensuring accurate revenue recognition and preventing fraud?

A: Internal control is the collective term for the methodical actions taken by a company to protect its…