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NEW QUESTION # 90
Which of the following is NOT one of the three general approaches used to control corporate crime?
Answer: B
NEW QUESTION # 91
During an external audit, the audit team identifies evidence that management has Intentionally manipulated the organization's reported revenue amount However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?
Answer: C
Explanation:
* Implications of Management Manipulation:
* Intentional manipulation, even if quantitatively immaterial, raises concerns about the reliability of management representations and the integrity of audit evidence.
* Why Option A is Correct:
* Reassessing the reliability of previously obtained evidence ensures that the auditors address potential biases or systemic issues arising from management's actions.
* Analysis of Other Options:
* B. Withdrawing from the audit: Premature unless the issue is pervasive.
* C. Legal definition of fraud: Auditors are not required to meet this threshold for assessing evidence.
* D. Quantitative materiality: Misstatements can be qualitatively material if they indicate intentional manipulation.
* Conclusion:The auditors must reconsider the reliability of evidence due to the qualitative implications of management's actions.
NEW QUESTION # 92
In the area of criminological theory, compliance is the theory that tries to prevent crime by providing economic incentives for voluntary conformity to the laws and using administrative efforts to control violations before they occur.
Answer: A
Explanation:
* Understanding Compliance Theory:
* Compliance theory emphasizes preventing crime through incentives for voluntary adherence to laws and proactive administrative measures.
* By addressing potential violations early, compliance theory aims to deter criminal behavior before it occurs.
* Application of the Theory:
* Examples include economic benefits for following regulations and monitoring mechanisms to identify early signs of noncompliance.
* Conclusion:The statement accurately describes compliance theory.
NEW QUESTION # 93
Which of the following Is FALSE regarding proactive fraud auditing procedures?
Answer: A
NEW QUESTION # 94
Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?
Answer: B
NEW QUESTION # 95
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