chap 10 types of fraud

Question 1

a form of earnings management in which revenues and expenses are shifted between periods to reduce fluctuations in earnings?

Answer 1

income smoothing

Question 2

what are the 2 main categories of fraud?

Answer 2

1. fraudulent financial reporting 2. misappropriation of assets

Question 3

what is fraud in the context of auditing FSs?

Answer 3

an intentional misstatement of FSs

Question 4

involves deliberate actions taken by managment to meet earnings objectives?

Answer 4

earnings managment

Question 5

what is earning management?

Answer 5

involves deliberate actions taken by managment to meet earnings objectives

Question 6

what is fraudulent financial reporting?

Answer 6

an intentional misstatement or omission of amounts or disclosures with the intent to deceive users

Question 7

why are thefts of comopany assets that are not material to the FSs a concern for managment?

Answer 7

they can increase in size over time and often lead to significant reputational harm once discovered and disclosed

Question 8

what is income smoothing?

Answer 8

a form of earnings management in which revenues and expenses are shifted between periods to reduce fluctuations in earnings

Question 9

broadly what is any intentional deceit meant to deprive another person or party of their property or rights:?

Answer 9

fraud

Question 10

what is fraud broadly?

Answer 10

any intentional deceit meant to deprive another person or party of their property or rights

Question 11

most cases of fraudulent financial reporting involve the intentional misstatement of amounts/disclosures?

Answer 11

amounts

Question 12

what is an intentional misstatement or omission of amounts or disclosures with the intent to deceive users

Answer 12

fraudulent financial reporting

Question 13

what is the most common fraud scheme?

Answer 13

missappropriation of assets

Question 14

an intentional misstatement of FSs

Answer 14

fraud