Engagement, Risk Assessment, Internal Control

Question 1

What is the primary objective of the fraud brainstorming session?

Answer 1

Determine whether the planned procedures in the audit program will satisfy the general audit objectives.

Question 2

Which of the following procedure would result in the discovery of possible noncompliance with laws and regulations?

Answer 2

Reading the minutes of the board of directors’ meetings.

Making inquiries of management or legal counsel.

Question 3

Performing tests at interim increases what risk?

Answer 3

it increases the detection risk

Question 4

The acceptable level of detection risk is inversely related to the:

Answer 4

Assurance provided by substantive tests.

Question 5

What is the primary objective of the fraud brainstorming session?

Answer 5

Assess the potential for material misstatement due to fraud.

Question 6

Proper authorization of write-offs of uncollectible accounts should be approved in which of the following departments?

Answer 6

The treasurer has the authorization

Question 7

What is the reason why a properly designed and executed audit may not detect a material misstatement due to fraud?

Answer 7

Audit procedures that are effective for detecting an unintentional misstatement may be ineffective for an intentional misstatement that is concealed through collusion