Audit & Assurance: Fraud

Question 1

Examples of conditions that create an environment for fraud

Answer 1

.inadequate corporate governance
.lack of "tone at the top"
.inadequate internal controll
.large financial incentives
.complex business operations
.high expectations by investors

Question 2

3 pillars of the fraud triangle

Answer 2

PRESSURE
RATIONALIZATION
OPPORTUNITY

Question 3

CAS 240.11 objectives of the auditor, with regards to fraud

Answer 3

.identify & assess RMM due to fraud
.obtain sufficient audit evidence regarding the assessment of RMM due to fraud through designing & implementing appropriate responses
.respond appropriately to fraud or suspected fraud identified during the audit