EBK AUDITING: A RISK BASED-APPROACH
11th Edition
ISBN: 9781337670203
Author: RITTENBERG
Publisher: YUZU
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Question
Chapter 4, Problem 7CYBK
To determine
Audit firm litigation:
An audit firm may face litigations for its failure in an audit engagement. Most of the audit litigations occur at the time of failure of business or detection of company frauds by the third party.
To choose: The false statement.
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Which of the following is NOT a possible legal risk that can arise because of a fraud investigation conducted in an improper manner? A. Forcible entry and detainer. B. Invasion of privacy. C. Defamation. D. Malicious prosecution.
Fraud is an ________ act by any person to conceal the truth, deceive and obtain illegal advantage.
a.
Unintentional
b.
Honest
c.
Intentional
d.
True and fai
Culpa aquiliana as distinguished from culpa contractual:
Proof of due diligence in the selection and supervision of employees is not considered a defense.
Proof of the contract and its breach is sufficient to warrant recovery.
The negligence of the defendant is only an incident in the performance of the obligation.
The source of liability is the negligent act of the person causing damage to another.
Chapter 4 Solutions
EBK AUDITING: A RISK BASED-APPROACH
Ch. 4 - Prob. 1CYBKCh. 4 - Prob. 2CYBKCh. 4 - Prob. 3CYBKCh. 4 - Prob. 4CYBKCh. 4 - Prob. 5CYBKCh. 4 - Prob. 6CYBKCh. 4 - Prob. 7CYBKCh. 4 - Prob. 8CYBKCh. 4 - Prob. 9CYBKCh. 4 - Prob. 10CYBK
Ch. 4 - Prob. 11CYBKCh. 4 - Prob. 12CYBKCh. 4 - Prob. 1RQSCCh. 4 - Prob. 2RQSCCh. 4 - Prob. 3RQSCCh. 4 - Prob. 4RQSCCh. 4 - Prob. 5RQSCCh. 4 - Prob. 6RQSCCh. 4 - Refer to the Focus on Fraud feature “Moss Adams...Ch. 4 - Prob. 8RQSCCh. 4 - Prob. 9RQSCCh. 4 - Prob. 10RQSCCh. 4 - Prob. 11RQSCCh. 4 - Prob. 12RQSCCh. 4 - Prob. 13RQSCCh. 4 - Prob. 14RQSCCh. 4 - Prob. 15RQSCCh. 4 - Prob. 16RQSCCh. 4 - Prob. 17RQSCCh. 4 - Prob. 18RQSCCh. 4 - Prob. 19RQSCCh. 4 - Prob. 20RQSCCh. 4 - Prob. 21RQSCCh. 4 - Able Corporation decided to make a public offering...Ch. 4 - KPMG (LO 1, 2, 3) KPMG LLP served as the external...Ch. 4 - ToshIba, EY (LO 1, 2, 3) In 2015, the business...
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- 1) Using the categories included in the professional standards, embezzlement is an example of: a)other illegal acts. b)misappropriation of assets. c)fraudulent financial reporting. d)an error. 2) Using the categories included in the professional standards, inappropriately and intentionally failing to expense expired amounts of the prepaid insurance is an example of a)misappropriation of assets. b)other illegal acts. c)fraudulent financial reporting. d)direct effect illegal act 3)A financial statement audit should be designed to obtain reasonable assurance that the financial statements are free of material misstatement due to: a)misappropriation of assets only. b)fraudulent financial reporting only.c)neither fraudulent financial reporting nor misappropriation of assets. d)both fraudulent financial reporting and misappropriation of assets 4)A financial statement audit should be designed to obtain reasonable assurance that the financial statements are free of material…arrow_forwardIndividuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.arrow_forwardWhat is the knowing misrepresentation of the truth in order to trick someone into entering into a contract? Fraud O Duress O Embezziement Mistakearrow_forward
- When an employee is in a position to detect and hide fraudulent activity, incompatible obligations exist. False or True?arrow_forwardWhich of the following is a way to prove that a fraud was intentional? A. Show that the suspect repeatedly engaged in activity of an apparent wrongful nature (pattern evidence). B. Show that the suspect did not personally gain anything from the fraudulent act. C. Show that the suspect had a legitimate motive for their actions at issue. D. Show that the suspects failed to conceal evidence of the fraud.arrow_forwardwhich of the following is true? a.When what is to be delivered is a generic thing, the creditor may ask a person other than the debtor to perform the obligation. b.Dolo incidente relates to the fraud committed at the time of the perfection of a contract. c.When negligence is imputed as a cause for the breach in an obligation, the same is presumed.arrow_forward
- What is an example of rationalization as one of the three elements causing a person to commit fraud?arrow_forwardMisrepresentation discovered by an insurer may result in the policy being voided. Which one (1) of the following circumstances must the insurer show occurred to legally void the policy? The misrepresentation was malicious. The misrepresented fact was material to the risk. The misrepresentation was the result of extreme carelessness by the insured's broker. The misrepresented fact was the product of collusion between the insured and the broker.arrow_forwardRecognize the difference between dishonest financial reporting and the misuse of property. Compare and contrast the potential differences between these two forms of fraud as they pertain to the fair reporting of financial information.arrow_forward
- Which of the following is not an element necessary to prove professional negligence? a. There must be a duty to exercise professional care. b. There must be a breach of the duty. c. There must be a causal relationship between the breach of duty and a resulting injury. d. There does not need to be an actual loss or damage.arrow_forwardWhen an employee is in a position to penetrate and hide fraud, incompatible roles exist. False or Truearrow_forwardIn most fraud cases, ____________ is the most difficult element to prove, yet it is also the most important element. A. Concealment. B. Deception. C. Intent. D. Materiality.arrow_forward
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