Auditor's response to fraud risk factors The auditor assesses the identified fraud risks after taking into account an evaluation of the client's programs and controls. How might the auditor respond to the results of the assessment of higher fraud risk?
The auditor should consider:
-Professional skepticism
a) Obtain more reliable evidence
b) Obtain additional corroborating evidence.
-Assignment of personnel and supervision--specialists or more experienced personnel
-More careful consideration of management's selection and application of accounting
principles
-Adding an element of unpredictability to auditing procedures
The auditor may change the nature, timing and extent of the audit procedures to be performed by increasing the extent of procedures, making them more persuasive, and moving more of them to the balance sheet date or later.
The response may involve the performance of procedures to further consider the risk related to:
a) Revenue recognition
b) Inventory quantities
c) Management estimates
Responses to consider the risk of management override of controls may include:
a) Examine journal entries and other adjustments made in preparation of financial statements
b) Review accounting estimates for biases
c) Evaluate business rationale for significant unusual transactions
You might also like to view...
Which stage of activity in logistics involves waste disposal and recycling?
A) inbound logistics B) operations C) outbound logistics D) reverse logistics E) services
4. Facial recognition technology allows multiple retailers to sell products to consumers through social media sites
Indicate whether the statement is true or false a. True b. False
Generation Y is defined as the generation of children born ________.
A. between WWI and WWII B. between 1965 and 1976 C. between 1946 and 1964 D. between 1977 and 1994 E. since the millennium
The Office of Federal Contract Compliance Programs (OFCCP), which monitors the affirmative action programs of federal contractors, was established in response to:
a. the Equal Pay Act b. the Fair Labor Standards Act c. Executive Order 11246 d. the National Labor Relations Act e. the Federal Contract Equity Act