In Those Audits Where There Is a Heightened Risk of Fraud

question 95

Multiple Choice

In those audits where there is a heightened risk of fraud related to debt obligations, which of the following will the auditor not typically perform?

• A) Search public records to identify debt obligations.
• B) Vouch and trace loan proceeds and debt payments.
• C) Send confirmations to lenders and creditors, including confirmation of compliance with any debt covenants.
• D) Obtain photocopies of supporting documents.

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Definitions:

Obligation

Refers to a duty or commitment that an individual feels bound to perform, often driven by moral or legal reasons.

Scientific Thinking

The application of scientific method and reasoning, including observation, hypothesis formation, experimentation, and conclusion to solve problems.

Organizational Behavior

Organizational behavior is the study of how individuals and groups interact within organizations and how these interactions affect organizational performance.

Data Collection

The process of gathering and measuring information on variables of interest, in a systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes.