What Should Auditors and Others Involved in the Financial Reporting

question 119

Multiple Choice

What should auditors and others involved in the financial reporting process do to mitigate the risk of fraudulent financial reporting?

• A)Acknowledge that there needs to exist a strong,highly ethical tone at the top of an organization that permeates the corporate culture,including an effective fraud risk management program.
• B)Continually exercise professional skepticism.
• C)Remember that strong communication among those involved in the financial reporting process is critical.
• D)All of the above.

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Definitions:

Strategy-Making Mode

The approach taken by an organization to formulate and implement strategies to achieve its goals.

Top Management

Senior-most executives who are responsible for overseeing the strategic direction and operational effectiveness of an entire organization.

Strategic Management

The process of identifying and executing an organization's strategic plan, by analyzing the competitive environment and aligning resources to achieve objectives.

Implementation

The process of putting a decision or plan into effect; executing or enacting a plan or policy.