In Those Audits Where There Is a Heightened Risk of Fraud

question 12

Multiple Choice

In those audits where there is a heightened risk of fraud related to stockholders' equity accounts,which of the following will the auditor typically not perform?

• A)Confirm terms of equity arrangements and shares held directly with shareholders.
• B)Account for and vouch all proceeds from stock issues.
• C)Confirm with shareholders whether there are any side agreements.
• D)Review equity authorizations in the board meeting minutes.

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Definitions:

Biological Therapy

Treatment that uses living organisms, substances derived from living organisms, or synthetic versions of such substances to treat disease.

Limitations

The restrictions or constraints that affect the scope, reach, or effectiveness of something, like a study, technology, or method.

Psychosexual Stages

A theory by Sigmund Freud suggesting human development occurs in five stages (oral, anal, phallic, latency, genital), each associated with sexual pleasure in different areas of the body.

Freud

The founder of psychoanalysis, Sigmund Freud was a neurologist who introduced key concepts regarding the unconscious mind and the dynamics of personality.