Acc 550 exam - Study guides, Class notes & Summaries

although all the current members of an internal audit activity have good records of performance, the manager is not sure if any of the members are ready to assume a management role. which of the following is an advantage of bringing in an outsider rather than promoting from within? a. management training costs are reduced when a qualified outsider is hired b. the manager can be sure that the new position will be filled by a competent employee c. bringing in an outsider is a less expensive ...

Three Conditions that Can Lead to Financial Statement Fraud (CAQ Video) - ANSWER 1. Pressure/incentive 2. Opportunity 3. Rationalization Fraud triangle! Why does AU-C 240 Focus on Testing Journal Entries? - ANSWER They're the best way to reveal mgmt override. The majority of sig F/S fraud involves senior mgmt, so have to test JEs for mgmt override.

What is the most costly type of fraud? - ANSWER Financial Reporting Fraud What is the distinguishing factor between fraud and error? - ANSWER "...whether the underlying action that results in the misstatement of the financial statements is intentional or unintentional" Are auditors responsible for the detection of fraud? - ANSWER "An auditor conducting an audit in accordance with ISA's is responsible for obtaining reasonable assurance that the financial statements taken as a whole are ...

Responses to Address the Risk of Management Override - ANSWER -review accting ests for biases -eval bus rationale for sig unusual trans (internal/external pressures) -test appropriateness of JEs and other adjs AU-C 240 Three Classifications of Journal Entries - ANSWER 1. Standard, recurring entries: procuremt, payroll. Lower risk.

ACC 550 Final Exam| Questions Solved 100% Correct | Verified What are some takeaways from Cynthia Cooper? - ANSWER 1. Ask questions until you're comfortable 2. What do you want your "dash" to stand for? 3. Is loyalty to superiors an appropriate value? 4. David Myers told his wife that if CC asked, he would tell the truth. Lesson: ask questions! 5. You have the power of choice. You can give it away but nobody can take it from you. How do you effectively resolve an ethical dilemma? - A...

Financial Reporting Fraud -theft (misappropriation of assets) - ANSWER Which is the most costly type of fraud? What is the most common type of fraud? -revenue recognition -improper disclosures -manipulation of expenses - ANSWER What fraud schemes are the most common (i.e. which accounts)?

what is the most costly type of fraud - ANSWER financial reporting fraud Can fraud be eliminated? - ANSWER no how does one distinguish between error and fraud? - ANSWER Intent who is responsible for preventing and detecting fraud - ANSWER management and those charged with governance

Indications of noncompliance - ANSWER 1) Investigation by governmental agency 2) Violations cited by regulators 3) Unusually large payments made in cash 4) Unexplained payments of gov't officials 5) Improperly recorded transactions 6) Purchasing prices significantly above/below market 7) Adverse media comment 8) Payments to registered tax havens What steps should an auditor take when noncompliance is identified or suspected? - ANSWER 1) Obtain understanding of the nature of the act and...