Professional Documents
Culture Documents
CH 09
CH 09
Modern Auditing:
Auditing:
Assurance
Assurance Services
Services and
and the
the Integrity
Integrity
of
of Financial Reporting, 8th Edition
Financial Reporting, 8 th
Edition
William C. Boynton
California Polytechnic State
University at San Luis Obispo
Raymond N. Johnson
Portland State University
– Intentional or Unintentional
– Misappropriation of Assets
The
The Fraud
Fraud Triangle
Triangle
Fraudulent
Fraudulent Financial
Financial Reporting
Reporting
• Opportunity
• Opportunity
• Rationalization
Auditing
Auditing for
for Fraud
Fraud
• Risk Assessment Procedures
• Brainstorming Session
• Specific Risks
Risk
Risk Assessment
Assessment Procedures
Procedures
• Inquiries of Management
A. Adequate training
Study
Study Break
Break
3. All of the following are objectives of a
brainstorming session except:
A. Allow management to set the tone
B. Allow for junior members to benefit
from senior members
C. Allow for a fresh outlook on situation
D. Allow for identification of actual
occurrences of fraud
• Control Risk
• Detection Risk
Inherent
Inherent Risk
Risk
• Inherent Risk Defined
A. AR = IR x CR x DR
Study
Study Break
Break
5. ______ is the risk that a material
misstatement could occur and will not
be prevented or detected by the entity’s
internal controls.
A. Inherent Risk
B. Audit Risk
C. Control Risk
D. Detection Risk
C. Control Risk
Study
Study Break
Break
6. The components of preliminary audit
strategies include all of the following
except:
A. Assessed level of inherent risk
B. Planned assessed level of control risk
C. Actual assessed level of control risk
D. Planned assessed level of analytical
procedures risk