When the Auditor Suspects That Fraud May Be Present, He

question 46

Multiple Choice

When the auditor suspects that fraud may be present, he or she should:

• A) continue with the original planned audit procedures.
• B) inform ASIC.
• C) obtain additional evidence to determine whether material fraud has occurred.
• D) immediately resign from the engagement.

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Definitions:

Costs Per Equivalent Unit

A calculation used in process costing that determines the cost of a single completed unit, considering work done on partial units.

Weighted-Average Method

A costing method used in manufacturing and accounting that averages the cost of inventory by taking the total cost of goods available for sale and dividing it by the total number of goods available.

Equivalent Units of Production

An accounting term used to denote the amount of finished goods produced by a company in a given period, after adjusting for work-in-progress inventory at the beginning and end of that period.

Materials Preparation Department

A division within a company responsible for preparing raw materials for production.