Question 13 Management can override controls by A. suggesting fictitious journal

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Question 13

Management can override controls by

A. suggesting fictitious journal entries (particularly at year end)

B. inappropriately changing assumptions and methods used to estimate account balances

C. omitting, advancing, or delaying modification of events that occurred during the reporting period

D. failing to disclose facts that could affect the amounts recorded in the financial statements

E. engaging in complex transactions designed to represent the financial condition of the company

F. both a and c

G. both b and d

H. both c and e

5 points

Question 14

The fraud discussion may include the following elements

A. a discussion of auditor's involvement in supervising employees with access to cash or other assets susceptible to misappropriation

B. a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of management

C. a consideration of the types of circumstances that might indicate the possibility of fraud

D. a discussion of how an element of predictability will be built into the nature, timing, and extent of audit procedures

E. a discussion of any allegations of fraud that have come to the attention of the auditor

F. both a and b

G. both c and d

H. both c and e

Which of the following is not a method to overstate revenues and receivables?

A. recording fictitious sales, recognizing revenue on shipments that were not made.

B. early recognition of sales, recognizing revenue in the current year even though shipment of goods or providing the service occurs in the following year.

C. recognizing cost of goods sold before the goods are invoiced.

D. shipment of a larger quantity of goods than the customer ordered.

E. recognition of revenue based on a swap (exchange) transactions, when the customer and the client exchanged products or services and both parties recognize revenue based on the exchange

A. suggesting fictitious journal entries (particularly at year end)

B. inappropriately changing assumptions and methods used to estimate account balances

C. omitting, advancing, or delaying modification of events that occurred during the reporting period

D. failing to disclose facts that could affect the amounts recorded in the financial statements

E. engaging in complex transactions designed to represent the financial condition of the company

F. both a and c

G. both b and d

H. both c and e

Explanation / Answer

Question 13 Management can override controls by A. suggesting fictitious journal

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