When Assessing the Risk for Fraud, the Auditor Must Be

question 12

Multiple Choice

When assessing the risk for fraud, the auditor must be cognizant of the fact that

• A) the existence of fraud risk factors means fraud exists.
• B) analytical procedures must be performed on revenue accounts.
• C) horizontal analysis is not useful in helping to determine unusual financial statement relationships.
• D) the auditor cannot make inquiries about fraud to company personnel who have no financial statement responsibilities.

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Definitions:

Lead(II) Nitrate

A white to colorless crystalline chemical compound used in making other lead compounds and some pyrotechnics.

Sodium Chloride

A white crystalline compound known as table salt, widely used in food seasoning and preservation; its chemical formula is NaCl.

Lead(II) Chloride

A chemical compound with the formula PbCl2, known for its white crystalline appearance and poor solubility in water.

Saturated Solution

A solution that contains the maximum amount of solute that can be dissolved in a solvent at a given temperature and pressure.