1) Shell companies require collusion amongst employees in order to be successful.
2) Under generally accepted auditing standards (GAAS) auditors are not currently
responsible for planning and performing auditing procedures to detect immaterial
misstatements, regardless of whether they are caused by error or fraud.
3) ________ schemes are committed when one person demands payment from another.
M.Conflicts of interest
N.Economic extortion
O.Illegal gratuities
P.Bribery
4) What are some red flags that may indicate that fraud is occurring?
5) Fraud or a fraudulent act is one that causes its victim to suffer an economic loss only.
6) Explain the relationship between an employees position and the level of theft
(according to Hollinger and Clarks research).
7) Compare two methods that can be used to develop estimates of lost sales and
incremental expenses.
8) ________ value represents the amount of cash likely to be received by owners of an
asset, assuming that pressure exists that will require the sales transaction to be
completed quickly.
U.Book
V.Liquidation
W.Market
X.Investment
9) The first step in the ten-step approach to targeted fraud risk assessment is Identify the
business processes and consider differences in those processes in foreign operations, as
well as between subsidiaries and decentralized divisions.