When Fraud Is Discovered, _______

question 21

Multiple Choice

When fraud is discovered, _______.

• A)auditors should immediately contact the Securities and Exchange Commission (SEC)
• B)auditors should determine the amounts involved, and then decide whether to report the fraud to management
• C)auditors gather sufficient appropriate evidence to support their conclusion
• D)the matter should immediately be referred to the internal audit function

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Definitions:

Equity

Represents the ownership value in an asset or business, generally calculated as the difference between assets and liabilities.

Competitiveness

The ability of a company, country, or product to compete effectively and successfully in the marketplace.

Residual Income

The income that remains after all required costs of capital and operating expenses have been paid.

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the profit from the investment by the cost of the investment.