AUDITING THEORY T OR F
71.
medium
b
An example of a fraud risk factor describing incentives/pressures is “ineffective board of
director
oversight over financial reporting.”
a. True
b. False
72.
medium
a
An example of a fraud risk factor describing opportunities is “ineffective board of director
oversight over financial reporting.”
a. True
b. False
73. (Public)
medium
a
PCAOB Standard 2 indicates that material fraud by senior management is a material
weakness.
a. True
b. False
74.
medium
a
Information and idea exchange sessions are required by SAS No. 99.
a. True
b. False
75.
medium
a
SAS No. 99 does not specifically indicate which members of an audit engagement team
must
attend a brainstorming session.
a. True
b. False
76.
medium
b
The presence of fraud risk factors increases the likelihood of fraud and usually suggests
that fraud
is present.
a. True
b. False77.
medium
b
Professional skepticism requires auditors to “either assume that management is dishonest
or they
have questionable honesty.”
a. True
b. False
78.
medium
a
Auditors should consider risk factors related to incentives, opportunities, and attitudes
whenever
they assess the likelihood of material misstatements due to fraud.
a. True
b. False
79. (Public)
challenging
b
Auditors must issue a qualified opinion on internal control whenever senior management
commits
fraud that is considered a material weakness.
a. True
b. False
80.
challenging
b
The board of directors has the primary responsibility to assess fraud risks and establish
corporate
governance programs and controls to prevent, deter, and detect fraud.
a. True
b. False
81.
challenging
a
One of the strongest internal corporate governance mechanisms over senior management is
the
audit committee of the board of directors.
a. True
b. False
82.
challenging
a
Because fraud perpetrators are often knowledgeable about audit procedures, SAS No. 99
requires
auditors to incorporate unpredictability into the audit plan.
a. True
b. False
83.
challenging
a
All misstatements the auditor finds during the audit should be evaluated for any indication
of
fraud.
a. True
b. False