WGU C254

Which of the following are the four areas of the fraud exposure rectangle - Management and Directors Relationship with others Organization & Industry Financial Results & Operational Characteristics To detect fraud, symptoms must be not Observed and Recognized - True When is a contingent liability supposed to be recognized on the books (a contingent liability is the potential for a payout based on a court case or some other future event)? - Probable Many accounts payable frauds occur wit...

Section 404 of the Sarbanes-Oxley Act of 2002, provided for increased scrutiny over which area of corporate governance: a. Internal controls design, implementation and effectiveness. b. The COSO framework that was created by the PCAOB to regulate auditor activities. c. Audit committees of boards of directors were now responsible for management of the company's financial reporting efforts. d. The reliability of financial reporting because CEOs must serve on the board of directors. - Inter...

With asset-based financial statement frauds, assets are most often: - Overstated Which of the following is a way to commit asset fraud? a. Overstating fixed assets b. Under-recording payroll taxes c. Over-recording contingent liabilities d. Recording sales discounts too high - Overstating fixed assets The WorldCom fraud was primarily an example of which type of fraud? - Overstatement of asset fraud Which of the following is not a common way in which companies overstate their assets durin...

Which of the following is a transaction that creates real liabilities for a company? a. Co-signing on a loan as a secondary signee. b. Collecting cash prior to the performance of a service. c. None of the above. - Collecting cash prior to the performance of a service When accounts payable-related liabilities are understated, purchase and inventory are often ___________. - Understated Which of the following types of fraud symptoms usually provides the best opportunity to find contingent li...

In the past (early 20th century time-frame), what was the general consensus of the principal purpose of audits (including among auditors)? - To detect fraud Why has there been so much frustration between the general public and auditors regarding fraud detection? - The public wants all cases of fraud detected, while auditors felt they only needed to be "reasonably certain" of its absence. Auditors can only say, with 100% certainty, that there is no fraud if they examine every transaction....

Which are the two most commonly manipulated to perpetrate financial statement fraud? - Revenues and Accounts Receivable SAS 99 requires auditors to assume there are material misstatements in revenue, though realizing there are situation-specific methods to recognize revenue and interpret the associated rules. - True Barry Minkow (a convicted fraudster) said: "Receivables are a wonderful thing - you create a receivable and you have ________________." - Revenue Stuffing distribution chann...

According to the financial statement fraud detection framework, fraud is rarely detected by which of the following: a. Analyzing the financial statements b. Understanding the inherent risks of a specific industry c. Learning management's motivations d. Breaking down and analyzing internal controls - Analyzing the Financial statements True or False Fearful of offending company personnel and being intimidated by company management are two reasons that an auditor could fail to react proper...

Which of the following types of frauds are considered the most difficult to find, usually requiring a tip? a. Overstatement of asset-related financial statement fraud. b. Inadequate disclosure financial statement fraud. c. Revenue-related financial statement fraud. d. Cost of goods sold-related financial statement fraud. - Inadequate disclosure financial statement fraud. Inadequate disclosure fraud usually involves: - Omitting disclosures that should have been made in the footnotes. Whi...

People will often be dishonest if they are placed in: a. An environment with poor controls. b. An organizational setting with strict accountability c. Positive modeling and labeling. d. A positive work environment. - An environment with poor controls. Which of the following is not a factor in creating a corporate culture of honesty and openness. a. Appropriate modeling by top executives b. Communicating expectations throughout the organization. c. Requiring periodic written confirmation ...