Review Questions Part II Flashcards
Accounting Clerk steals incoming customer payment
Occupational Crime
Describe Compliance
conformity to law by economic incentives to control violations before they occur
Fraud examiner should only designate an area as high risk if assessment has conclusively revealed that fraud occurs there
FALSE
For compliance program to be effective, organization must communicate program to all its employees through training programs
TRUE
Differential reinforcement Theory
Behavior weakened by punishment and negative punishment
Interrelated component of internal control system
risk assessment
According to ISA 240, two types of frauds relevant for audit purposes?
- Intentional Fraudulent financial reporting
- Misappropriation of company assets
Behaviorist view
- incentive programs
- task-related bonuses
Two primary strategies to control corporate criminal behavior
- Compliance
- Deterrence
What is foundation of fraud risk management
Effective corporate governance
For analytical review procedures to be most effective, scheme must materially impact financial statements
TRUE
Silk/Vogel - rationalize illegal or non-compliant conduct
- compliance with gov too costly
- violations protect job
- damage done by large number or parties
Easier to detect fraud than prevent it
FALSE
COSO identified five interrelated components of
Internal Control
What is COSO monitoring
Evaluation and communication of internal deficiencies in a timely manner
