The Major Emphasis in GAAS Related to Consideration of Fraud

question 4

Multiple Choice

The major emphasis in GAAS related to consideration of fraud in a financial statement audit (AU-C 240) is on:

• A)employee misappropriation of assets.
• B)management fraud.
• C)client fraud on customers.
• D)employee embezzlement.

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Definitions:

Indebtedness

The state of owing money or being under a moral obligation to repay a benefit or service received.

Reciprocity

denotes a mutual exchange of privileges or benefits between parties, often observed in social and economic contexts.

Persuasion

The process by which one person tries to change the belief, opinion, position, or course of action of another person through argument, pleading, or explanation.

Nonverbal Communication

The process of conveying a message without the use of words, which can include gestures, body language, facial expressions, and other visual cues.