Reference no: EM132460483

True or False only

Question 1. The ZZZZ Best fraud was and example of a solo auditor not being independent in conducting the audit

Question 2. A properly conducted audit can give absolute assurance that there are no material misstatements.

Question 3. The SEC's definition of fraud includes omitting to state a material fact.

Question 4. Fraud includes misstatement due to error.

Question 5. The public often considers the purpose of an audit to be the finding of all fraud.

Question 6. Internal auditors should report to either the CEO or the CFO.

Question 7. The PCAOB is comprised of 10 full-time members.

Question 8. PCAOB AS 2401 (SAS 99) requires external auditors to inquire of management and of key employees.

Question 9. Auditors should use a bottom up approach in determining which internal controls to test.

Question 10. The IIA suggests that internal auditors conduct ethics surveys of employees.

Question 11. PCAOB 2401 (SAS 99) includes auditors using surprise techniques

Question 12. The PCAOB is in favor of requiring a forensic audit for all public companies.

Question 13. Audit evidence is gathered in three fieldwork stages.

Question 14. A clawback clause in the employment contract of management allows for the company to recover all the compensation paid to that executive.

Question 15. Scienter refers to fraudulent actions.

Question 16. The four legal elements of fraud include the victim incurring a loss.

Question 17. External auditors can be considered to take a macro approach while forensic accountants take a micro approach.

Question 18. A rule of thumb is that accounts receivable should not be greater than 15% of credit sales.

Question 19. Some of the major turn-of-the-century frauds were discovered by the external auditors.

Question 20. Cash flows should move in the same direction as net income.

Question 21. Lower level CPA firm staff are often used in investigative accounting in order to reduce costs.

Question 22. A fraud hotline is an important device for detecting fraud.

Question 23. Like internal auditors, forensic accountants are limited by the materiality principle.

Question 24. The audit committee of the BOD overseas the internal control processes of the company

Question 25. The AICPA no longer sets auditing standards.