When Assessing the Risk of Fraud, an Auditor Can Consider

question 39

Multiple Choice

When assessing the risk of fraud, an auditor can consider:

• A) Attitudes and rationalization to justify a fraud.
• B) Incentives and pressures to commit fraud.
• C) Opportunities to perpetuate a fraud.
• D) All of the above.

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Definitions:

Subsequent Events

Events that occur after the balance sheet date but before the financial statements are issued or available to be issued, affecting the financial information presented.

Material and Likely

A term used to describe when an event is both significant enough to impact financial decisions and has a reasonable chance of occurring.

Statement of Financial Position

A financial statement that shows an entity's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Global Capital Flows

The movement of money for the purpose of investment, trade, or business operations across international borders.