What Is the Best Method an Auditor May Use to Detect

question 23

Multiple Choice

What is the best method an auditor may use to detect fraud in the financial statements of clients?

• A)Use professional skepticism.
• B)Understand and properly apply Generally Accepted Accounting Standards.
• C)Brainstorm with the client to find the types of fraud occurring.
• D)Actively search for all errors in the financial statements.

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Definitions:

Stability

The condition where an economy or a financial system operates without excessive fluctuations or crises.

High Prices

Situations where the cost of goods and services are above average or expected levels.

Fed

The Fed, short for Federal Reserve System, is the central banking system of the United States, responsible for monetary policy, including regulating banks and managing the country's money supply.

Member Bank Reserves

The portion of deposits that banks must hold in reserve, either as physical cash or as deposits with the central bank, to ensure liquidity.