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A company has a 22% profit margin and has employee fraud of $220,000. Calculate the additional revenue needed to offset this lost income.
An entity's financial statements were misstated over a period of years because large amounts of revenue were recorded in journal entries that involved debits and credits to an illogical combination
Which of the following relatively small misstatements most likely could have a material effect on an entity's financial statements?
If the auditor believes the risk of material misstatement due to fraud is high, what does SAS 99 suggest they do?
Which of the following statements describes why a properly designed and executed audit may not detect material fraud?
Embezzlement of assets reduces the left side of the accounting equation. To conceal the theft, the embezzler must find a way to reduce the right side of the accounting equation. A perpetrator would
Smart embezzlers realize that when making false journal entries, reducing ___________is not a good concealment method.
Which of the following is most likely to be a response to the auditor's assessment that the risk of material misstatement due to fraud for the existence of inventory is high?
If skimming has been in practice for years in a business, why might it be hard to detect using horizontal analysis?
In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. A possible explanation is:
Which of the following procedures would a fraud examiner most likely perform in searching for unrecorded liabilities?
The scheme where normally the books are "closed" at the end of each reporting period, and sales that occur after the closing date do not appear in the current period income statement is called:
When an accounts receivable clerk is allowed to steal one customer's payment and apply the next one toward that payment and so on, this is a violation of:
Which of the following best describes what is meant by the term "fraud risk factor?"
Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements in an entity's financial statements?
The client's attorney usually decides whether a formal report on the fraud investigation is necessary. If the results of the investigation were inconclusive, the attorney may not wish to incur the a
Which of the following is an example of fraudulent financial reporting?
Standard control procedures over customer remittances received through the mail include having the mailroom personnel:
To enhance controls in the credit sales area, the warehouse should be instructed not to release goods until:
During the consideration of a small business client's internal controls, the fraud examiner discovered that the accounts receivable clerk approves credit memos and has access to cash. Which of the f
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?
Which of the following controls most likely would assure that all billed sales are correctly posted to the accounts receivable ledger?
Which of the following procedures could be used in the detection of deposit account fraud?
The fraud examiner is concerned that individuals in the purchasing department are initiating purchases on their own to companies in which they have a vested interest. The document the examiner would
A fraud auditor who has confirmed accounts receivable may discover that the sales journal was held open past year-end if: