How Must an Auditor Address Fraud in the Planning Stage

question 20

Multiple Choice

How must an auditor address fraud in the planning stage?

• A)The auditor must test for fraud in the planning stage by sampling accounts.
• B)The auditor must consider the likelihood of fraud existing in the company in the planning stage.
• C)The auditor must realize that most people are honest and not automatically assume that fraud exists when planning the audit.
• D)The auditor must not be aggressive in its initial approach to fraud,as trust may be lost by the client.

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Definitions:

Exclusive Dealing

A practice where a supplier prohibits its customers from buying goods or services from its competitors.

Federal Trademark Dilution Act

A United States law that aims to protect famous trademarks from uses that dilute their distinctiveness, even without showing confusion or competition.

Madrid Protocol

An international treaty designed to simplify the process of applying for trademark protection in multiple countries through a single application.

Exclusive Territorial Distributorship

A business agreement granting one distributor the sole rights to sell a product or service within a specified geographic area.