Auditors Must Assess Fraud Risk on Every Audit and Respond

question 66

Multiple Choice

Auditors must assess fraud risk on every audit and respond to the risks that are identified.Which of the following is not a procedure required to further address the fraud risk of management override of internal control?

• A)Reviewing accounting estimates for biases.
• B)Examining physical controls over assets.
• C)Evaluating the business rationale for significant unusual transactions.
• D)Examining journal entries and other adjustments for evidence of fraud.

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Definitions:

Critical Period

A specific time frame during the development of an organism when it is particularly sensitive to certain environmental stimuli that are necessary for proper development.

Scientific Method

A way to answer questions using empirical research and data-based conclusions.

Framingham

A city in Massachusetts known for the Framingham Heart Study, a long-term, ongoing cardiovascular cohort study.

Testable

Testable describes a hypothesis or theory that can be empirically examined through experimentation or observation, allowing for verification or falsification.