Auditors May Identify Conditions During Fieldwork That Change or Support

question 26

Multiple Choice

Auditors may identify conditions during fieldwork that change or support a judgment about the initial assessment of fraud risks. Which of the following is not a condition which should alert an auditor that the initial assessment should be changed?

• A) preliminary assessment of control risk has been modified
• B) discrepancies in the accounting records
• C) unusual relationships between the auditor and management
• D) missing or conflicting evidence

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Definitions:

Electronic Currencies

digital forms of currency that exist electronically, such as cryptocurrencies, which are used for online transactions.

Dollarization

The process of a country abandoning their currency and using U.S. Dollars or another currency instead.

Economic Inflation

A general increase in prices and fall in the purchasing value of money over time.

Buying Power

The ability of individuals or entities to purchase goods and services, often influenced by income levels, inflation, and market conditions.