Which of the following statements is accurate about "fraud risk factors" considered when conducting an audit?
A) Factors whose presence indicates that fraud exists.
B) Factors whose presence often have been observed in circumstances where frauds have occurred.
C) Factors whose presence will require modification to planned audit procedures.
D) Factors obtained during the audit which lead to required communications with the audit committee.

Question

Quizplus · Accepted Answer

Fraud risk factors are characteristics or conditions that may indicate that a fraud has occurred, is occurring, or may occur in the future. These factors have been observed in circumstances where frauds have occurred in the past, and are used to help auditors identify areas of higher risk and adjust their audit procedures accordingly. While the presence of fraud risk factors does not necessarily indicate that fraud is present, it does warrant additional scrutiny and consideration during the audit.

Which of the Following Statements Is Accurate About "Fraud Risk