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Questions and Answers
Management's ability to manipulate accounting records is one reason why management override of controls is a significant risk in all entities.
Management's ability to manipulate accounting records is one reason why management override of controls is a significant risk in all entities.
True
The level of risk of management override of controls is consistent across all entities.
The level of risk of management override of controls is consistent across all entities.
False
Responses to fraud risks identified at the financial statement level are detailed in ISA 240 Appendix 2.
Responses to fraud risks identified at the financial statement level are detailed in ISA 240 Appendix 2.
False
Management's ability to meet revenue targets without pressure makes them less susceptible to perpetrating fraud.
Management's ability to meet revenue targets without pressure makes them less susceptible to perpetrating fraud.
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Audit procedures for identified fraud risks should take into account the possibility of management overriding controls.
Audit procedures for identified fraud risks should take into account the possibility of management overriding controls.
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The unpredictable nature of management override of controls makes it a less significant risk in audits.
The unpredictable nature of management override of controls makes it a less significant risk in audits.
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The audit committee is not involved in overseeing management's fraud risk assessment and response processes.
The audit committee is not involved in overseeing management's fraud risk assessment and response processes.
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ISA 240 does not require the auditor to inquire about any actual, suspected, or alleged fraud affecting the entity.
ISA 240 does not require the auditor to inquire about any actual, suspected, or alleged fraud affecting the entity.
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Analytical procedures performed during planning may help identify unusual relationships that could indicate material misstatements in revenue accounts.
Analytical procedures performed during planning may help identify unusual relationships that could indicate material misstatements in revenue accounts.
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The auditor does not consider the risks of fraud in revenue recognition while assessing fraud risks.
The auditor does not consider the risks of fraud in revenue recognition while assessing fraud risks.
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Other information obtained by the auditor does not indicate the risk of material misstatements due to fraud.
Other information obtained by the auditor does not indicate the risk of material misstatements due to fraud.
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Management override of controls is not addressed as part of the auditor's responsibilities in responding to fraud risks.
Management override of controls is not addressed as part of the auditor's responsibilities in responding to fraud risks.
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The auditor is required to identify and assess the risks of material misstatement due to fraud at the financial statement level only.
The auditor is required to identify and assess the risks of material misstatement due to fraud at the financial statement level only.
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The auditor should not evaluate which types of revenue, revenue transactions, or assertions give rise to risks of fraud.
The auditor should not evaluate which types of revenue, revenue transactions, or assertions give rise to risks of fraud.
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The auditor must document when they conclude that there are no risks of fraud in revenue recognition.
The auditor must document when they conclude that there are no risks of fraud in revenue recognition.
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Management override of controls is not considered a significant fraud risk factor.
Management override of controls is not considered a significant fraud risk factor.
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The auditor is not required to perform audit procedures specifically addressing identified fraud risks.
The auditor is not required to perform audit procedures specifically addressing identified fraud risks.
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ISA 315 (Revised) does not provide guidance on identifying and assessing fraud risks.
ISA 315 (Revised) does not provide guidance on identifying and assessing fraud risks.
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