The Purpose of the Fraud Triangle Is to Identify

question 45

Multiple Choice

The purpose of the fraud triangle is to identify:

• A) The causes of when the audit opinion should be qualified.
• B) The causes of and reasons for fraud when there may be intentional misstatements or omissions of amounts or disclosures in the financial statements.
• C) The causes of when there is a lack of independence in performing an audit.
• D) The causes of illegal acts.

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Definitions:

Hydrolysis

A process where water is utilized to decompose a specific substance by breaking its bonds.

Polypeptides

Chains of amino acids linked by peptide bonds, which can function independently or as part of larger protein molecules.

Pepsinogen

An inactive precursor of pepsin, secreted by the stomach lining; it is converted to pepsin in the presence of stomach acid to digest proteins.

Bile

A digestive fluid produced by the liver and stored in the gallbladder, important for the breakdown and absorption of fats.