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2- Planning activities > Detecting Fraud > Flashcards

Flashcards in Detecting Fraud Deck (4)
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1
Q

two types of fraud

A

fraudulent financial reporting

misappropriation of assets (theft)-false entries to conceal theft of goods. indicator would be if employees have negative relationship. opportunities would be bad internal controls. attitutudes is employee lifestyle changed quickly.

2
Q

fraud risk factors (fraud triangle)

A

incentive/pressure - generating losses, economic pressure

opportunity-unnecessarily complex transactions, subjective areas on financial statements, ineffective monitoring of management, bad internal controls

attitude rationalization-lack of commitment(tone at the top) to enforce ethical standards

3
Q

consideration of fraud is a _____ and not limited to audit planning

A

continuing process

4
Q

address management override of internal control

A

examine adjusting journal entries
especially nonstandard entries
especially those at end of period
evaluate estimates for bias-perform a retrospective review
examine authorization for unusual transactions (evaluate the business purpose)