The Auditor's Evaluation of the Likelihood of Material Employee Fraud

question 95

Multiple Choice

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of:

• A)tests of controls.
• B)tests of transactions.
• C)understanding the entity's internal control.
• D)the assessment of whether to accept the audit engagement.

Comprehend the consequences of failing to make necessary adjusting entries.

Distinguish between different types of revenues and how they are recognized.

Understand the concept of accrued expenses and revenues and how to adjust for them.

Know the sequence for preparing financial statements.

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