The fraud discussion may include the following elements
A)a discussion of management's involvement in supervising employees with access to cash or other assets susceptible to misappropriation
B)a consideration of unusual or unexplained changes in the behavior or lifestyle of employees that have come to the attention of the auditor
C)a consideration of the types of evidence that might indicate the possibility of fraud
D)a discussion of how an element of predictability will be built into the nature,timing,and extent of audit procedures
E)a discussion of any allegations of fraud that have come to the attention of management
F)both A and B
G)both C and D
H)both C and E

Question

Quizplus · Accepted Answer

The fraud discussion should include both A and B, as these are important factors to consider in identifying the possibility of fraud. Additionally, it should include a consideration of the types of evidence that might indicate fraud (choice C) and how audit procedures will be designed to address this risk (choice D). While allegations of fraud that have come to the attention of management (choice E) should be discussed, this is not the only element that needs to be considered. Therefore, option H is not the best choice.

The Fraud Discussion May Include the Following Elements