The Center for Audit Quality (CAQ) Report Identifies Which of the Following

question 6

Multiple Choice

The Center for Audit Quality (CAQ) report identifies which of the following ways in which individuals involved in the financial reporting process can mitigate the risk of fraudulent financial reporting?

• A) Individuals involved in financial reporting need to acknowledge that there needs to exist a strong, highly ethical tone at the top of an organization that permeates the corporate culture, including an effective fraud risk management program.
• B) Individuals involved in financial reporting need to continually exercise professional skepticism.
• C) Individuals involved in financial reporting need to remember that strong communication among those involved in the financial reporting process is critical.
• D) All of the above.

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Definitions:

Lump-sum Price

This is a total amount agreed upon for a contract that is not itemized or broken down into individual costs or charges.

Relative Market Values

The comparison of an item’s market price to other similar items in the relevant market.

Depreciation Expense

The portion of the cost of a fixed asset that is considered as an expense due to its use, wear, and tear over time.

Estimated Useful Life

The length of time, usually expressed in years or periods, that an asset is expected to be used in business operations.