When Identifying Possible Frauds That May Exist, the Auditor Should

question 53

Multiple Choice

When identifying possible frauds that may exist, the auditor should ask all of the following questions except?

• A) Who are the key players in the business?
• B) Does management demonstrate principles of integrity?
• C) How could customers or vendors acting alone commit fraud?
• D) What types of fraud have occurred or been suspected in the past?
• E) All of the above are questions an auditor should ask.

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Definitions:

Artifacts

Objects created by humans that are typically of cultural or historical interest.

Adhocracy

Emphasizes shared, decentralized decision making; extreme horizontal specialization; few levels of management; the virtual absence of formal controls; and few rules, policies, and procedures.

General Environment

Is the set of cultural, economic, legal–political, and educational conditions found in the areas in which the organization operates.

Specific Environment

The set of owners, suppliers, distributors, government agencies, and competitors with which an organization must interact to grow and survive.