An Auditor Learns That a Client's Employee in Control of Inventory

question 23

Multiple Choice

An auditor learns that a client's employee in control of inventory gets divorced and is responsible for paying a large amount of child support. All of the following for the audit of inventory likely are true except:

• A)fraud risk increases.
• B)the risk of misappropriation of assets increases.
• C)risk of material misstatement increases.
• D)detection risk increases.

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Definitions:

Grain

The small, hard seeds of cereal plants like wheat, rice, and corn, used as a primary source of food for humans and animals.

Rats

Small mammals known for their sharp teeth, keen sense of smell, and often considered pests in many societies, but also used extensively in scientific research.

Utility Functions

Functions that quantify the satisfaction a consumer derives from consuming quantities of goods and services, used in economic analysis to understand consumer behavior.

Rats

Small to medium-sized rodents known for their sharp teeth and adaptability, often used in scientific research or considered pests.