As part of its anti-fraud program, Elm Company is outlining the responsibilities of different stakeholders.
Who is ultimately responsible for ensuring the effectiveness of the organization's anti-fraud program?

• A.Forensic accountants
• B.Management
• C.The compliance function
• D.Internal auditors

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Which of the following is a TRUE statement regarding the role of a well-designed organizational structure as part of an anti-fraud program?

• A.A confused organizational structure makes it harder for a fraudster to perpetrate and conceal their misdeeds.
• B.Effectively documenting and communicating the organizational structure to all employees can help prevent fraud.
• C.Formally establishing and communicating the proper flow of information in an organization can hinder its fraud prevention initiatives.
• D.Displaying organizational and departmental hierarchies can help fraudsters select their targets.

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During an external audit, the audit team identifies evidence that management has intentionally omitted some expenses from the company ' s financial statements in order to conceal an asset misappropriation scheme.
However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

• A.The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement
• B.The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence.
• C.The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit.
• D.The auditors do not need to be concerned with this evidence, as asset misappropriation schemes are not considered relevant or material for external audit purposes.

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In identifying the inherent fraud risks that could apply to the organization the fraud risk assessment team should discuss

• A.All of the above
• B.The organization's incentive programs
• C.The possibility of management override of controls
• D.Risks to the organization's reputation

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Which of the following is an example of organizational crime?

• A.A doctor conspiring with patients to Tile false health care insurance claims
• B.A salesman offering bribes to secure a contract
• C.Management of several construction companies engaging In bid rigging
• D.An accounting clerk forging company checks to herself

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