A Good Fraud Auditing Involves Four Steps

question 26

Multiple Choice

A good fraud auditing involves four steps. Which of the following is the correct sequence?

• A) Identifying fraud risk exposures; building audit programs to proactively look for symptoms and exposures; investigating fraud symptoms identified; and identifying the fraud symptoms of each exposure.
• B) Identifying fraud risk exposures; identifying the fraud symptoms of each exposure; building audit programs to proactively look for symptoms and exposures; and investigating fraud symptoms identified.
• C) Building audit programs that proactively check for symptoms and exposures; identifying fraud risk exposures; identifying the fraud symptoms of each exposure; and investigating fraud symptoms identified.
• D) Identifying the fraud symptoms of each exposure; identifying fraud risk exposures; investigating fraud symptoms identified; and building audit programs to proactively look for symptoms and exposures.

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Definitions:

Capital at Risk

The amount of capital that could be lost in an investment due to various risks.

Insurance Company

An organization that provides financial protection and compensation for specified losses in return for payment of a premium.

Probability

The chance or odds of a specific event taking place.

Premiums

The amount paid for an insurance policy.