The Auditor's Evaluation of the Likelihood of Material Employee Fraud

question 95

Multiple Choice

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of:

• A)tests of controls.
• B)tests of transactions.
• C)understanding the entity's internal control.
• D)the assessment of whether to accept the audit engagement.

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Definitions:

Pounds

The currency unit of the United Kingdom, also known as the British pound sterling, used as a medium of exchange.

Futures Contracts

An agreement to buy or sell a specified quantity of a commodity or financial instrument at a predetermined price at a specified time in the future.

Profit or Loss

The financial result of a company's operations and activities for a specific period, indicating the difference between revenues and expenses.

Ounce

A unit of weight used primarily in the United States, Canada, and the United Kingdom, equal to one-sixteenth of a pound or about 28.35 grams.