In actively considering fraud in the financial statement audit,the audit team will most likely realize which of the following when performing substantive procedures?
A)Accounting journal entries may have been used to perpetrate a fraud.
B)Most fraud is not material enough to consider.
C)Journal entries do not supply enough evidence to detect fraud.
D)New technology prevents fraud more thoroughly than manual systems.

Question

Quizplus · Accepted Answer

Accounting journal entries can be manipulated to hide fraudulent activity and therefore the audit team should consider the possibility of journal entry fraud as part of their substantive procedures. Option B is incorrect because all suspected fraud, no matter how small, should be investigated by the audit team. Option C is incorrect because journal entries can provide important evidence in detecting fraud. Option D is not relevant to the question.

In Actively Considering Fraud in the Financial Statement Audit,the Audit