The Purpose of the Fraud Triangle Is to Identify

question 45

Multiple Choice

The purpose of the fraud triangle is to identify:

• A) The causes of when the audit opinion should be qualified.
• B) The causes of and reasons for fraud when there may be intentional misstatements or omissions of amounts or disclosures in the financial statements.
• C) The causes of when there is a lack of independence in performing an audit.
• D) The causes of illegal acts.

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Definitions:

Theoretical Size

The ideal, nominal size of a part or feature as defined in drawings, before tolerances are applied.

Limits

In engineering and manufacturing, limits refer to the maximum and minimum dimensions a part can have to be considered acceptable.

Allowance

The intentional difference in dimensions between mating parts to ensure a proper fit.

Basic Hole System

A hole basis system of fits in manufacturing where the hole is the component with the basic size, and the shafts are adjusted for different fits.