Which of the Following Risks of Fraud Should Ordinarily Be

question 80

Multiple Choice

Which of the following risks of fraud should ordinarily be presumed on a financial statement audit by the audit team?

• A)Chief financial officer misappropriation of funds.
• B)Misapplication of revenue recognition principles.
• C)Management's inappropriate use of reserves.
• D)Lack of expenses related to stock options.

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Definitions:

Quota Rights

Allowances or permissions given to countries or companies to import or export a certain amount of goods.

Federal Revenue

The income received by the federal government from taxes, fees, and other sources to fund its operations.

Auctioning Off

The process of selling an item to the highest bidder through a competitive bidding process, commonly used for selling goods, property, or services.

Import Quota

A government-imposed limit on the quantity of a specific good that can be imported into a country within a given timeframe.