Audit

Errors includes

• Engaging in complex transactions that are structured to misrepresent the financial position or financial performance of the entity

• Concealing or not disclosing facts that could affect the amounts recorded in the FS

• An incorrect accounting estimates arising from oversight or misinterpretation of facts.

• International misapplication of accounting policies relating to amounts, classification, manner of presentation or disclosure

Fraud involving one or more members of management or those charged with governance is referred to as

• management fraud

• employee fraud

• fraudulent financial reporting

• misappropriation of assets

The auditor is concerned with fraud that causes a material misstatement in the financial statements. The are two types of intentional misstatements that are relevant to the auditor: misstatements resulting from fraudulent financial reporting and misstatements resulting from

• Management fraud

• employee fraud

• missappropriation of assets

• collusion within the entity or with third parties

Fraudulent financial reporting involves intentional misstatements including omissions of amounts or disclosures in financial statements to deceive financial statement users. It may be accomplished in number of ways, including

• Embezzling receipts

• Stealing physical assets or intellectual property

• Using an entity's assets for personal use

• Manipulation, falsification, or alteration of accounting records or supporting documentation from which the financial statements are prepared.

What is one common way to conceal a theft?

• By charging stolen item to an expense account

• By creating cash through inter-bank cash transfers

• By stealing cash from customers A and then using customer B's balance to pay customer A's accounts receivables

• By the conversion of stolen assets into cash

Government auditing often extends beyond examinations leading to the expression of opinion on the fairness of financial presentation and includes audits or efficiency, economy, effectiveness and also

• Accuracy

• Compliance

• Evaluation

• Internal Control

What assurance is provided by the auditor in an agreed - upon procedures engagement?

• Reasonable

• Absolute

• Moderate

• No assurance

For assurance engagements regarding historical financial information, reasonable assurance engagements are called

• Audits

• Reviews

• Compilations

• Examinations

Relevant criteria contribute to conclusions that are

• Free from bias

• Clear and comprehensive

• Subject to different interpretations

• Useful for decision making

What type of assurance engagement is involved when the practitioner expressed a positive form of conclusion?

• Limited assurance engagement

• Positive assurance engagement

• Reasonable assurance engagement

• Absolute assurance