Which of the following risks of fraud should ordinarily be presumed on a financial statement audit by the audit team?
A)Chief financial officer misappropriation of funds.
B)Misapplication of revenue recognition principles.
C)Management's inappropriate use of reserves.
D)Lack of expenses related to stock options.

Question

Quizplus · Accepted Answer

Misapplication of revenue recognition principles is a common risk of fraud that should be presumed on a financial statement audit. The other options may also be risks of fraud, but they are not necessarily presumed and would require further investigation by the audit team.

Which of the Following Risks of Fraud Should Ordinarily Be