According to SAS 99, the Auditor Should Ask Management About

question 27

Multiple Choice

According to SAS 99, the auditor should ask management about the risks of fraud and how they are addressed. Which of the following is not described as an issue that the auditor should ask management about?

• A) Whether management has knowledge of fraud or suspected fraud
• B) Management's understanding of the risk of fraud
• C) Whether and how management communicates the company's financial results to its employees
• D) Programs that the entity has established to prevent, deter, or detect fraud

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Definitions:

Allowances

Monetary or other forms of compensation given in addition to regular income, often to cover specific needs or expenses.

Discounts

Reductions from the usual cost of goods or services, offered to customers to encourage purchase, clear inventory, or reward loyalty.

List Price Deductions

Discounts or reductions in the initial selling price of goods or services.

Everyday Low Pricing

A pricing strategy where a retailer consistently offers products at a low price rather than relying on sales or discounts.