The Auditor Should Not Consider That Fraud Is Present in Revenue

question 113

True/False

The auditor should not consider that fraud is present in revenue accounts because revenue recognition does not typically play a role in fraudulent financial reporting.

---

Definitions:

Moral Standards

Principles governing what individuals believe to be right or wrong conduct.

Instinctual Drives

Fundamental, innate impulses that compel individuals to act or behave in certain ways, such as hunger or reproduction.

Ego

In Sigmund Freud’s theory, the structure that begins to develop in response to the fact that instinctual demands of the id are not always immediately met. The ego develops to curb the desires of id so that the individual does not suffer any unpleasant consequences.

Reality Principle

A psychoanalytic concept involving the ability of the mind to assess the external world and act upon it accordingly, often in contrast to the pleasure principle.