Individuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.

Q: Accountants are permitted to express “negative assurance” in which of the following reports?a.…

A: Auditing is the examination or inspection of the books of accounts or the financial statements by an…

Q: The fraud triangle asserts that the following three factors must exist for a person to commit…

A: “As only one item is given in the question, it is assumed this particular answer is asked by the…

Q: Independence is compromised in which of the following situations? The auditor withdraws himself from…

A: 1. The auditor withdraws himself from the engagement team who will audit the business of his…

Q: Business damages, as a result of financial fraud, directly impact the operations of any company.…

A: Fraud is an intentional act which is committed in order to defraud a group of people for the purpose…

Q: Which type of agent is not liable for a breach of contract by his principal:   a. undisclosed…

A: Contract: It is an agreement between two or more parties which describes the rights and duties of…

Q: As a result of the recent mortgage crisis, many banks reported record losses to their mortgage…

A: 1.

Q: The following factor does not contribute to fraudulent activity? Select one: O a. Bad debt expense O…

A: Factors does contribute to fraudulent activity are given below: 1. Opportunity  2. Financial…

Q: Which of the following statements is incorrect? A bank providing a loan to the entity is not a…

A: D) An entity needs to disclose if it has a common director with another entity because there might…

Q: Give an example of an error or fraud that would misstate financial statements to affect the accounts…

A: Given: The example for the financial statement that would be misstated by the error or fault.

Q: a. Identify the type of fraud that took place. (e.g. misappropriation of assets o fraudulent…

A: a. The type of fraud that took place, in this case, is Misappropriation of assets. In this Case,…

Q: Which of the following combinations is a good way to conceal employee fraud but an ineffective means…

A: The management fraud alludes to an intentional misleading by the executives to collect monetary…

Q: A company is required to report a liability on its balance sheet when it expects to lose a lawsuit…

A: The accounting principal of conservatism states that all losses should be recorded but uncertain…

Q: In a fraud examination, original documents must be protected from damage and tampering toa.…

A: Fraud examination: Wrongdoing checks require attempts to address claims or signs of wrongdoing where…

Q: Determine if false financial reporting or misuse of assets has occurred. Compare and contrast the…

A: Generally, fraudulent financial reporting happens when an international deception occurs in the…

Q: Which of the following losses can be considered as operational risk losses? a) A counterparty going…

A: Operational risk is defined by the Bank for International Settlements (BIS) as the risk of loss…

Q: The following items represent various types of liabilities. Identify if the following independent…

A: Under this situation following two concepts will be applicable 1. Contingent Liability: Contingent…

Q: Distinguish between the terms errors and fraud. Distinguish between fraudulent financial reporting…

A: Answer 1) Fraud is an intentiional act Involving the use of deceptiion that results in a materiial…

Q: Substantial equivalency refers toa. An auditor’s tendency not to believe management’s assertions…

A: Substantial equivalency: The concept where CPAs licensed in one state is allowed to practice in…

Q: Which of the following is a major difference in auditors’ liability under the Securities Act of1933…

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Q: Business damages, as a result of financial fraud, directly impact the operations of any company.…

A: Fraud includes activities such as theft, corruption, conspiracy, bribery etc. Fraud can occur in any…

Q: Fraudulent reporting by management could include a. Fictitious revenues from a fake customer. b.…

A: Sarbanes Oxley Act (SOX): Sarbanes Oxley Act is the act passed by the government to address the…

Q: Fraudulent financial reporting is most likely to be committed by whom? Select one: a. company…

A: Ans. Fraudulent Financial Reporting is a kind of intentional misrepresentation of the financial…

Q: List five factors that may indicate that a client may not remain a going concern. For each indicate…

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Q: Rationalization for fraud can fall under two categories: “no harm” and “no responsibility.” Assume…

A: Rationalization: Rationalization emphasizes on the justification provided by an employee and finds…

Q: May an action arising from fraud be waived? explain

A: Fraud- Fraud is defined as the deliberate misrepresentation of an existing material truth by one…

Q: An independent auditor’s report is a guarantee that the financial statements are free from fraud or…

A: Auditor primary objectives is to give opinion on the financial statements and to give true and fair…

Q: Which of these statements is/are correct? | If an auditor had the required knowledge and…

A: Audit means checking of financial statements of a company.

Q: A misstatement in the financial statements can be considered material if knowledge of…

A: We have the following question: A misstatement in the financial statements can be considered…

Q: When investors sue auditors for damages under section 11 of the Securities Act of 1933,they must…

A: The Securities Exchange Act 1934:   "The Securities Exchange Act 1934 controls everyday trading of…

Q: ecognize the difference between dishonest financial reporting and the misuse of property. Compare…

A: Answer: Fraudulent and forgery activities are done to manipulate numbers in financial statements

Q: With an example each, distinguish between fraudulent financial

A: Fraudulent financial reporting Fraudulent reporting coverage refers to a statement or omission…

Q: Explain why the failure of financialstatement users to differentiateamong business failure,…

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Q: What is the primary difference between fraud and errors in financial statement reporting

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Q: The auditors who find that the client has committed an illegal act would be most likely to withdraw…

A: Auditors are the professionals who are involved in the scrutiny of the financial reports and…

Q: IDENTIFY THE EFFECT OF THE FOLLOWING TRANSACTION TO THE RISK OF MATERIAL MISSTATEMENT TO FINANCIAL…

A: Internal audit can be done by internal employee of the company and is done on the requirement of…

Q: What are the most common approaches that perpetrators use to commit fraudulent financial reporting

A: Fraudulent financial reporting is defined as the purposeful misrepresentation of financial…

Q: The auditor’s primary consideration is whether, and how, internal control prevents, or detects and…

A: The answer for the theory question on Auditing is discussed hereunder :

Q: A company is required to report a liability on its balance sheet when it expects to lose a lawsuit…

A: Solution Principle of conservatism state that record all the possible losses but revenues and assets…

Q: When creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a…

A: Audited Financial statements are those statements that include the auditor's independent reports and…

Q: Under sales on credit, the supplier-customer relationship may be terminated under the law in the…

A: Please see the next step for the solution

Q: When an event impacts a financial statement element, it should be recognized in the accounting…

A: The financial statements of a company are prepared at the end of an accounting year which shows the…

Q: e. Of the following, the most significant risk factor relating to the risk of misstatement arising…

A: The question is based on the concept of Financial Accounting.

Q: An auditor issued an unqualified opinion on financial statements that failed to disclose that a…

A: Auditing refers to evaluating the books of accounts to determine the misstatement if any or to check…

Q: What are the defining characteristics of (a) white-collar crime, (b) employee fraud, (c)…

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Q: Which of the following should be disclosed as a note to financial. statements as a contingent…

A: A contingent liability is an unexpected liability arising from the past events. This is dependent on…

Q: Explain the relation between ethics and financial statement fraud by giving examples.

A: Explanation: When it comes to the preparation, presentation, and disclosure of financial results,…

Q: primary difference between fraud and error in financial reporting

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.