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Which action is potentially unethical because it understates COGS? A. Understating purchases B. Understating purchase returns C. Understating ending inventory D. Understating purchase discounts - A Why is it unethical for a supervisor to ask an accountant to capitalize the marketing research p...

America's capital markets are the envy of the world because of their efficiency, liquidity, and resiliency. What role do financial statements play in American capital markets? - They present a fair picture of the financial position and results of the organization Why are American financial state...

Perpetrator- Management of a company Victim- Shareholders and/or debt-holders and regulators Most expensive type of fraud - Management Statement fraud Which legal code makes the bribing of public officials illegal? - Title 18, US. Code Section 201 Perpetrator- Customers of an organization Vict...

If _____________ is understated, then ________________ will directly be overstated (less tax effect). - Cost of Goods Sold, Net Income Cost of goods sold can be understated by overstating ending inventory. True or False - True There are over 15 ways of manipulating cost of goods sold. To what en...

Most economists agree that __________ and _________ were the root causes of the economic downturn. - - sub-prime mortgages - other risky financial instruments Financial statements prepared by organizations play an important role in keeping America's markets efficient, what do financial statemen...

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 c...

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...

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 cont...

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 asso...

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 fr...

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-relate...

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...

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...

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 liabi...