What was the largest bankruptcy in US history?
Which section of SOX is most highly debated
According to the book, has recent legislation reduced the risk of fraud in the US?
Yes, but the risk of fraud will never be completely eliminated
Which type of financial statement fraud method is the most common?
Improper revenue recognition
Incentive packages offered to many executives caused the attention of many CEOs to shift from
Managing the firm to manage the stock price
Unachievable expectations of Wall Street analysts targeted
Which is not an element of the fraud exposure rectangle?
Financial results and Operating Characteristics
Management and Directors
Organization and Industry
The basic concept behind strategic reasoning is similar to
Which of the following is a relationship to investigate as an auditor
When looking into management and the board of directors, you want to understand which of the following?
all of the above
Financial statement fraud is usually committed by
executives and managers
Which officer in a company is most likely to be the perpetrator of financial statement fraud?
When looking for financial statement fraud, auditors should look for indicators of fraud by:
examining fianncial statements
evaluating changes in financial statements
examining relationships the company has with other parities
examining operating characteristics of the company
all of the above
The three aspects of management that a fraud examiner needs to be aware of include all of the following except:
their religious convictions
their influence in making decisions
Which of the following is least likely to be considered a fianncial reporting fraud symptom or red flag
Many indicators of fraud are circumstantial. This fact can make convicting someone of fraud difficult. Which of the following would be most helpful
a repeated pattern of similar fradulent act
In the phar mor fraud case, several different methods were used for manifpulating the financial statements. These included all of the following except
funneling losses into unaudited subsidiaries
Most financial statement frauds occur in smaller organizations with simple managmenet structures rather than in large historically profitable organizations, this is because
management fraud is more difficult to commit when there is a more formal organizational strucutre of management
Management fraud is usually committed on behalf of the organization rather than against it. Which of the following would not be a motivation of fraud on behalf of an organzation
CEO needs a new car
All of the following are indivators of financial statement fraud except:
Unusually rapid growth of profitability
Threat of a hostile takeover
Dependence on one or two products
Large amounts of available cash
threat of a hostile takeover
During an audit, an auditor considers the conditions of the auditee and plans the audit accordingly. This is an example of
In the context of strategic reasoning, if an auditor only follows the established audit plan and does not consider other factors relating to the auditee then this is an example of
zero order reasoning
In reason years, many SEC investigations have taken place on the improper issuance of stock options to coporate executives. These practices increase executive compensation at the expense of shareholders. This practice is known as:
Backdating stock options