Which of the Following Conditions Identified During the Audit Increases

question 47

Multiple Choice

Which of the following conditions identified during the audit increases the risk of employee fraud?

• A)Large amounts of cash in the bank.
• B)Existence of a mandatory vacation policy for employees performing key functions.
• C)Inventory items of small size,but high value.
• D)Presence of reconciling items on a client prepared year-end proof of cash.

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Definitions:

Legal Claim

A formal assertion by a party that they are entitled to some legal right or remedy.

Enforceable

Capable of being imposed or upheld by legal process or authority.

Release

A contract in which one party forfeits the right to pursue a legal claim against the other party.

Recovery

The process of obtaining rightful recovery or reimbursement for losses, damages, or sums owed.