Fraud Examination
6th Edition
ISBN: 9781337619677
Author: Albrecht, W. Steve, Chad O., Conan C., Zimbelman, Mark F.
Publisher: Cengage,
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Chapter 3, Problem 8DQ
To determine
Classification of evidence
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To gather audit evidence related to accounts receivable, the client should mail the confirmation requests.
TRUE OR FALSE? WHY?
Which of the following types of documentary evidence should the auditor consider to be the most reliable?
Select one:
a. A sales invoice issued by the client and supported by a delivery receipt from an outside trucker.
b. Confirmation of an account payable balance mailed by and returned directly to the auditor
c. An audit schedule prepared by the client’s controller and reviewed by the client’s treasurer.
d. A check, issued by the company and bearing the payee’s endorsement, that is included with the bank statements mailed directly to the auditor
Forensic Accounting: Assurance Engagement 1: Expenditure Analysis. Expenditureanalysis is used when fraud has been discovered or strongly suspected and the informationto calculate a suspect’s income and expenditures can be obtained (e.g., asset and liabilityrecords, bank accounts). Expenditure analysis consists of establishing the suspect’s knownexpenditures for all purposes for the relevant period, subtracting all known sources of funds(e.g., wages, gifts, inheritances, bank balances), and identifying the difference as “expenditures financed by unknown sources of income.”The law firm of Gleckel and Morris has hired you. The lawyers have been retained byBlade Manufacturing Company in a case involving a suspected kickback by a purchasingemployee, E. J. Cunningham. Cunningham is suspected of taking kickbacks from MasonVarner, a salesman for Tanco Metals. Cunningham has denied the charges, but LanierGleckel, the lawyer in charge of the case, is convinced the kickbacks have…
Chapter 3 Solutions
Fraud Examination
Ch. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Prob. 11DQCh. 3 - Prob. 1TFCh. 3 - Prob. 2TFCh. 3 - 3. Developing a positive work environment is of...Ch. 3 - Prob. 4TFCh. 3 - Prob. 5TFCh. 3 - Prob. 6TFCh. 3 - 7. If a perpetrator is not caught, his confidence...Ch. 3 - Prob. 8TFCh. 3 - Prob. 9TFCh. 3 - Prob. 10TFCh. 3 - Prob. 11TFCh. 3 - Prob. 12TFCh. 3 - Prob. 13TFCh. 3 - Prob. 14TFCh. 3 - Prob. 15TFCh. 3 - Prob. 16TFCh. 3 - Prob. 17TFCh. 3 - Prob. 18TFCh. 3 - Prob. 19TFCh. 3 - Prob. 20TFCh. 3 - In order to create a culture of honesty and...Ch. 3 - Prob. 22TFCh. 3 - Prob. 23TFCh. 3 - Prob. 24TFCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - The best way for management to model appropriate...Ch. 3 - Prob. 4MCQCh. 3 - Most frauds start small and: If not detected,...Ch. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Prob. 10MCQCh. 3 - Prob. 11MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 22MCQ
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Similar questions
- Which of the following can be used as a fundamental source of information in an audit? a. Money in the safe b. Oral testimony of the person responsible for accounting c. An e-mail from a supplier d. None e. Income statementarrow_forwardWhat is the most effective sequence of interviews in a fraud investigation? Please provide references with URL if any.arrow_forwardDefine fraud examination and describe various engagements performed by fraud examiners.arrow_forward
- An audit procedure that involves taking a sample of recorded transactions and obtaining original source documents supporting the recorded transactions is referred to as what? a. vouching b. directional testing c. a walk-through d. tracingarrow_forwardWhat are the goals of a fraud audit for internal auditors? Explain briefly.arrow_forwardSelect from the following the main object of an audit. a. Expression of expert opinion b. Detection and Prevention of fraud and error c. Preparation of financial statements d. Examination of books of accountsarrow_forward
- Which of the following types of documentary evidence should the auditor consider the most reliable?a. Sales invoice created by the client with the support of proof of delivery from an outside delivery serviceb. Confirmation of debt balances sent and returned directly to the auditorc. Check made by the company and includes a sign of approval of the party receiving the money, which is included in the bank statement sent directly to the auditord. An audit list prepared by the client controller and reviewed by the client treasurer.arrow_forwardAuditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts would most likely yield the highest level of evidence? a. Accounts receivable. O b. Interest expense. O c. Travel and entertainment expense. O d. Accounts payable.arrow_forwardWhich of the following types of audit evidence is the least persuasive? a. Bank statements obtained from the client. O b. O c. Prenumbered purchase order forms. O d. Correspondence from the client's attorney about litigation. Test counts of inventory performed by the auditor.arrow_forward
- An example of an analytical procedure is the comparison of Results of a statistical sample with the expected characteristics of the actual population. O Computer generated data with similar data generated by a manual accounting system. Recorded amounts of major disbursements with appropriate invoices. O Financial information with similar information regarding the industry in which the entity operates.arrow_forwardThe main object of an audit is a. Expression of expert opinion b. Detection and Prevention of fraud and error c. Examination of books of accounts d. Preparation of financial statementsarrow_forwardWhat is the objectives for Internal Auditors in doing a fraud audit? Briefly explain.arrow_forward
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