To Address Heightened Risks of Fraud, the Auditor Can Do

question 102

Multiple Choice

To address heightened risks of fraud, the auditor can do all of the following except

• A) use specialists to assist in evaluating the accuracy and reasonableness of management's key estimates.
• B) decrease the amount of substantive tests.
• C) use ACL or IDEA to search for fictitious revenue transactions.
• D) use EXCEL to perform analytical procedures at the disaggregated level.

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Definitions:

Multiple Subsidiary

A business structure wherein a single parent company owns several subsidiary companies.

Inter-Entity Transactions

Inter-entity transactions refer to the economic exchanges between different entities within the same corporate structure, often requiring elimination during consolidation for accurate financial reporting.

NCI

Non-Controlling Interest, a stake in a company that is not sufficient to yield control over the company, representing ownership by minority shareholders.

Profit

The financial gain derived from a transaction or the operation of a business after subtracting expenses.