When Auditing with "Fraud Awareness," Auditors Should Especially Notice and Review

question 39

Multiple Choice

When auditing with "fraud awareness," auditors should especially notice and review employee activities under which of these conditions?

• A) The company always estimates the inventory but never takes a complete physical count.
• B) The petty cash box is always locked in the desk of the custodian.
• C) Management has published a company code of ethics and sends frequent communication newsletters about it.
• D) The board of directors reviews and approves all investment transactions.

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Definitions:

Fear of Death

A pervasive anxiety or dread related to the contemplation or anticipation of dying or the unknown aspects of death.

Individualist Cultures

Societies that emphasize the needs and goals of the individual over the collective group.

Collectivist Cultures

Societies or cultures that prioritize the group over the individual, emphasizing community, cooperation, and shared values.

Economic Activity

Actions that involve the production, distribution, and consumption of goods and services within an economy.