When looking for financial statement fraud, auditors should look for indicators of fraud by:
A. Examining financial statements
B. Evaluating changes in financial statements
C. Examining relationships the company has with other parties
D. Examining operating characteristics of the company
E. All of the above
F. None of the above because auditors don't have a responsibility to find financial statement fraud
Answer: E
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Fraud Chapter 11
- In recent years, many SEC investigations have taken place on the improper issuance of stock options to corporate executives. These practices increase executive compensation at the expense of shareholders. This practice is known as:
- In the context of strategic reasoning, if an auditor only follows the established audit plan and does not consider other factors relating to the auditee, then this is an example of which of the following?
- During an audit, an auditor considers the conditions of the auditee and plans the audit accordingly. This is an example of which of the following?
- All of the following are indicators of financial statement fraud except:
- Management fraud is usually committed on behalf of the organization rather than against it. Which of the following would not be a motivation of fraud on behalf of an organization?
- Most financial statement frauds occur in smaller organizations with simple management structures, rather than in large, historically profitable organizations. This is because:
- In the Phar-Mor fraud case, several different methods were used for manipulating the financial statements. These included all of the following except:
- Many indicators of fraud are circumstantial; that is, they can be caused by non fraud factors. This fact can make convicting someone of fraud difficult. Which of the following types of evidence would be most helpful in proving that someone committed fraud?
- Which of the following is least likely to be considered a financial reporting fraud symptom, or red flag?
- The three aspects of management that a fraud examiner needs to be aware of include all of the following except:
- Which officer in a company is most likely to be the perpetrator of financial statement fraud?
- Financial statement fraud is usually committed by: