Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Chapter 9, Problem 5TFQ
To determine
Introduction: According to research by COSO (2010), 300 cases of financial statements involving fraud were reviewed .These statements were issued between 1988 and 2007.About 60% of the frauds were due to the fact that the frauds were inappropriately recorded.
To choose: Whether the statement is true or false.
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Chapter 9 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 9 - Prob. 1TFQCh. 9 - Prob. 2TFQCh. 9 - Prob. 3TFQCh. 9 - Prob. 4TFQCh. 9 - Prob. 5TFQCh. 9 - Prob. 6TFQCh. 9 - Prob. 7TFQCh. 9 - Prob. 8TFQCh. 9 - Prob. 9TFQCh. 9 - Prob. 10TFQ
Ch. 9 - Prob. 11TFQCh. 9 - Prob. 12TFQCh. 9 - Prob. 13TFQCh. 9 - Prob. 14TFQCh. 9 - Prob. 15TFQCh. 9 - Prob. 16TFQCh. 9 - Which of the following statements is true...Ch. 9 - Prob. 18MCQCh. 9 - Prob. 19MCQCh. 9 - Prob. 20MCQCh. 9 - Prob. 21MCQCh. 9 - Prob. 22MCQCh. 9 - Prob. 23MCQCh. 9 - Prob. 24MCQCh. 9 - Which of the following statements is false...Ch. 9 - Prob. 26MCQCh. 9 - Prob. 27MCQCh. 9 - Prob. 28MCQCh. 9 - Prob. 29MCQCh. 9 - Prob. 30MCQCh. 9 - Prob. 31MCQCh. 9 - Prob. 32MCQCh. 9 - Refer to Exhibit 9.1. Which accounts are relevant...Ch. 9 - Prob. 34RSCQCh. 9 - Prob. 35RSCQCh. 9 - An important task ¡n the audit of the revenue...Ch. 9 - Prob. 37RSCQCh. 9 - Prob. 38RSCQCh. 9 - Prob. 39RSCQCh. 9 - Prob. 40RSCQCh. 9 - Prob. 41RSCQCh. 9 - Prob. 42RSCQCh. 9 - Prob. 43RSCQCh. 9 - Prob. 45RSCQCh. 9 - Prob. 46RSCQCh. 9 - Prob. 47RSCQCh. 9 - Stainless Steel Specialties (SSS) is a...Ch. 9 - Prob. 49RSCQCh. 9 - Prob. 50RSCQCh. 9 - Prob. 51RSCQCh. 9 - Prob. 52RSCQCh. 9 - Prob. 53RSCQCh. 9 - Prob. 54RSCQCh. 9 - Prob. 55RSCQCh. 9 - Prob. 56RSCQCh. 9 - Prob. 57RSCQCh. 9 - Prob. 58RSCQCh. 9 - Prob. 59RSCQCh. 9 - Prob. 60RSCQCh. 9 - Prob. 61RSCQCh. 9 - Prob. 62RSCQCh. 9 - Prob. 63RSCQCh. 9 - Prob. 64RSCQCh. 9 - Prob. 65RSCQCh. 9 - Prob. 66RSCQCh. 9 - Prob. 67RSCQCh. 9 - Prob. 68RSCQCh. 9 - Prob. 69RSCQCh. 9 - Prob. 70RSCQCh. 9 - Prob. 71RSCQCh. 9 - Read the following scenario about Strang...Ch. 9 - Prob. 73RSCQCh. 9 - Prob. 74RSCQCh. 9 - ZYNGA (LO Z 3, 4, 5, 6, 8) Refer to the Why It...Ch. 9 - Prob. 76FFCh. 9 - UTSTARCOM, INC. (LO 2, 3, 4, 5, 6, 8) UTStarcom is...Ch. 9 - Prob. 78FFCh. 9 - Prob. 79FF
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- Distinguish between fraudulent financial reporting and misappropriation of assets. Discuss the likely difference between these two types of fraud on thefair presentation of financial statementsarrow_forwardWhich of the following are financial statement frauds? Select which three options are correct. A. Intentional misapplication of accounting principles related to amounts. B. Forging of accounting records C. Intentional misapplication of accounting principles related to disclosure. D. Unintentional omission from the financial statements of transactionsarrow_forwardWhat is the usefulness of using the Fraud Triangle to evaluate the risk of major misstatements in financial reporting?arrow_forward
- Explain, what types of fraud scheme is Steinhoff likely to use to commit financial statement fraud?arrow_forwardIn what ways might accounting frauds be similar to casesof academic dishonesty?arrow_forwardWhich of the following statements describes why a properly designed and executedaudit may not detect a material misstatement in the financial statements resultingfrom fraud?(1) Audit procedures that are effective for detecting unintentional misstatements maybe ineffective for an intentional misstatement that is concealed through collusion.(2) An audit is designed to provide reasonable assurance of detecting materialerrors, but there is no similar responsibility concerning fraud.(3) The factors considered in assessing control risk indicated an increased risk ofintentional misstatements, but only a low risk of unintentional misstatements.(4) The auditor did not consider factors influencing audit risk for account balancesthat have effects pervasive to the financial statements taken as a wholearrow_forward
- What is the primary difference between fraud and error in financial reportingarrow_forwardThe following are examples of circumstances that may indicate the possibility that the financial statements may contain a material misstatement resulting from fraud, except Group of answer choices Last-minute adjustments that significantly affect financial results or unusual journal entries. Transactions that are recorded in a complete or timely manner or are properly recorded as to amount, accounting period, classification, or entity policy. Unsupported or unauthorized balances or transactions. Tips or complaints to the auditor about alleged fraud.arrow_forwardMisstatements in the financial statements can result from errors or fraud and may consist of any of the following: An inaccuracy in gathering or processing data from which financial statements are prepared. A difference between the amount, classification, or presentation of a reported financial statement element, account, or item and the way that it should have been reflected under GAAP. The omission of a financial statement element, account, or item. A financial statement disclosure that is not presented in conformity with GAAP. The omission of information required to be disclosed in conformity with GAAP. An incorrect accounting estimate due to oversight, misrepresentation of facts, or fraud. Management’s judgments concerning an accounting estimate or the selection or application of accounting policies that the auditor may consider unreasonable or inappropriate. What steps would you take if you discover 1 of the above issues in a routine audit? Would you take…arrow_forward
- What is the ethical value of applying the Fraud Triangle to assess the risk of material misstatements in the financial statements?arrow_forwardWhy are receivables and revenue ripe areas for abuse or outright fraud? Income tax rules have been adjusted in recent years to make it easier to hide revenue from credit sales. OSEC rules have been adjusted in recent years to make it easier to hide revenue from credit sales. No real event, such as the receipt of cash, is necessary to record a debit to Accounts Receivable and a credit to Revenue. Generally accepted auditing standards do not allow auditors to scrutinize the detailed records of credit sales.arrow_forwardOpportunities for fraudulent reporting are present in circumstances when the fraud is easy to commit and when detection is difficult. An opportunity for fraud would least likely arise from the following situatioarrow_forward
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