Which of the Following Represents the Primary Difference Between an Audit

question 44

Multiple Choice

Which of the following represents the primary difference between an audit and forensic accounting?

• A)An audit has the focused responsibility to detect fraud in the client organization while forensic accounting sets out to prevent fraud.
• B)An audit has no responsibility for fraud while forensic accounting provides an audit specific to material fraud discovery.
• C)An audit must follow Generally Accepted Auditing Standards while the forensic accountant is bound to Generally Accepted Fraud Standards.
• D)An audit utilizes sampling techniques to detect material misstatements while forensic accounting examines the entire population of fraudulent transactions.

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Definitions:

Warranty Revenue Recognition

The accounting process of recognizing revenue from warranties provided, typically over the period the warranty covers.

Coupon Redemption

The process of a bondholder or an investor submitting a bond's coupon to the issuer to receive interest payment.

Advertising Cost

Expenses incurred to promote products or services to potential consumers through various media channels.

GAAP

A body of established accounting conventions and criteria for the preparation of financial reports.