Explain the impact of SAS No. 99 on auditors' responsibilities.
Answer:
SAS No. 99, effective December 2002, requires that auditors explicitly consider fraud risks when planning and performing an audit. Auditors must understand types and characteristics of fraud. Audit teams must review clients' financial statements for areas susceptible to fraud and communicate with each other during planning of the audit. Auditors must ask management and audit committee members about any past or current instances of fraud. Since many frauds involve revenue recognition, auditors must exercise special care and testing in examining revenue accounts. Audit procedures and testing must be tailored in response to fraud risk assessment. Auditors must evaluate the risk of management override of controls and any other indications of fraud occurrences. All audit procedures, testing and findings must be documented and communicated to management and the audit committee. Auditors must evaluate and recognize the impact of technology on fraud risks, as well as opportunities technology may provide to design fraud-auditing procedures.
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Computer Fraud
- Which of the following is not a way to improve fraud detection?
- Which of the following is not a way to reduce fraud losses?
- Which of the following is not a way to make fraud less likely to occur?
- The fraud appears to be misappropriation of assets that is being concealed with a lapping scheme. Controls would include:
- Describe four ways companies can reduce losses from fraud.
- Describe at least four ways a company can make fraud less likely to occur.
- What are the actions recommended by the Treadway Commission to reduce the possibility of fraudulent financial reporting?
- _____ is a simple, yet effective, method for catching or preventing many types of employee fraud.
- On Tuesday morning, Chen Lee, Chief Information Officer at American Trading Corporation (ATC), got some bad news. The hard drive use to store system data backups was lost while it was being transported to an offsite storage location. Chen called a meeting of her technical staff to discuss the implications of the loss. Which of the following is most likely to relieve her concerns over the potential cost of the loss?
- Which of the following will not reduce the likelihood of an occurrence of fraud?
- Most frauds are detected by
- Why do fraudulent acts often go unreported and are therefore not prosecuted?
- Why is computer fraud on the rise?
- Downloading a master list of customers and selling it to a competitor is an example of
- The simplest and most common way to commit a computer fraud is to
- The fraud that requires the least computer knowledge or skill involves
- Why do many fraud cases go unreported and unprosecuted?
- Why is computer fraud often more difficult to detect than other types of fraud?
- Why is computer fraud often much more difficult to detect than other types of fraud?
- How does the U.S. Justice Department define computer fraud?
- Which of the following is least likely to result in computer fraud?
- What are some of the distinguishing characteristics of fraud perpetrators?
- The most efficient way to conceal asset misappropriation is to
- This component of the fraud triangle explains how perpetrators justify their (illegal) behavior.
- What is the most prevalent opportunity within most companies to commit fraud?