Risk and Procedures for Control Paper 25

1

What is an auditor’s responsibility who discovers management involved in what is financially immaterial fraud?






2

Which of the following is most likely to be considered a risk factor relating to fraudulent financial reporting?






3

Which of the following is most likely to be presumed to represent fraud risk on an audit?






4

An auditor who discovers that a client’s employees paid small bribes to municipal officials most likely would withdraw from the engagement if






5

Which of the following factors most likely would cause a CPA to not accept a new audit engagement?






6

Which of the following factors would most likely heighten an auditor’s concern about the risk of fraudulent financial reporting?






7

An auditor who discovers that a client’s employees have paid small bribes to public officials most likely would withdraw from the engagement if the






8

Which of the following illegal acts should an audit be designed to obtain reasonable assurance of detecting?






9

Which of the following relatively small misstatements most likely could have a material effect on an entity’s financial statements?






10

During the annual audit of Ajax Corp., a publicly held company, Jones, CPA, a continuing auditor, determined that illegal political contributions had been made during each of the past seven years, including the year under audit. Jones notified the board of directors about the illegal contributions, but they refused to take any action because the amounts involved were immaterial to the financial statements. Jones should reconsider the intended degree of reliance to be placed on the






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