chap 9 considering fraud risk Flashcards
if the auditor determines that the presumption of revenue transactions and their related account balances and presentation and disclsure as being risky does not apply to a particular audit, what do they need to do?
document her conclusions in the working papers
the application of professional skepticism consists of what 2 primary components?
- a questioning mind 2. critical assesment of the audit evidence
the auditors consideration of risk of material misstatment due to fraud is made at what 2 levels?
- FS level 2. assertion level for classes of transactions, account balances, and presentation and disclosure
is the risk of not detecting a material misstatement higher when it’s due to fraud or error?
fraud
the auditors risk assessment shouled hapen when in the audit?
ongoing
due to a number of high prfile instances of fraudulent finanical reporting involving misstatements in ______ ______ auditing standards require the auditor to presume that risk of fraud exist there
revenue recognition
risk related to audit objectives for _____ transactions and their related account balances and presentation and disclsure are presumed to be significant risks in most audits
revenue
in regards to fraud, auditing standards require the auditor to make inquires of mangement and others in the entity about what 2 things?
- their knowledge of any actual, suspected, or alleged fraud affecting the client 2. whether management has communicated any info about fraud risks to those charged with governance
to assist the auditor in assessing the risk of material misstatement due to fraud, auditing standards outline procedures the auditor should perform to obtain info from managment about their consideration of fraud. What are inquiries the auditor is required to make
- inquire of managment about their assessment of the risk that the FSs may be materially misstted due to fraud 2. ask managers to describe the frequency of managments assessments and the extent of their consideration of risks due to fraud 3. discuss managments processes that are designed to identify, respond to, and monitor the risks of fraud in the organization