Which of the Following Statements About Fraud Is True

question 116

Multiple Choice

Which of the following statements about fraud is true?

• A)Unless auditors can provide assurance that the financial statements are free of material misstatements due to fraud,there is no justification for the audit function.
• B)The AICPA has mandated that the auditor take on more responsibility than previously required because of management's demand for fraud detection.
• C)It is the responsibility of the auditor to provide internal control over a client organization sufficient to discover or prevent fraud from occurring.
• D)Auditor-initiated fraud is a large concern of shareholders and the audit committee must continually monitor the auditors to ensure they are not misstating financial statements.

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, critical for decision-making in production and pricing strategies.

Demand Function

A mathematical expression showing the relationship between the quantity of a good demanded by consumers and its price.

Edited

Modified or changed, especially to correct or improve a text, film, or recording.

Typeset

The arrangement and composition of text material with a variety of fonts, sizes, and styles for printing or digital display.