When Analyzing Accounts for Fraud Risk

question 46

Multiple Choice

When analyzing accounts for fraud risk,

• A) companies will generally attempt to overstate accounts payable and net income.
• B) the inventory account is generally not susceptible to fraud since the auditor must verify the existence of the inventory.
• C) payroll is rarely a significant risk for fraudulent financial reporting.
• D) fixed assets are rarely stolen because of their large size.

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Definitions:

Standing Alone

The state or condition of being independent, self-reliant, and not influenced or supported by others.

Without Support

The condition of being alone or lacking assistance, guidance, or backing from others.

Pulling Up

The act of grasping or reaching for objects as a developmental milestone in infants, indicating motor skills improvement.

Visual Scanning Ability

The capability to efficiently look over a wide area or series of objects to locate a specific target or information.