Question
Why can't the auditor be assured of detecting fraud?
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Answer
Fraud may involve collusion or forgery.
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Question
What are the three classes of financial statement assertions?
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Answer
Transactions, balances, and presentation/disclosure.
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Question
What audit step targets management override through journal entries?
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Answer
Testing journal entries, especially unusual or nonstandard ones.
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Question
Why does a history of favorable estimates matter in fraud risk assessment?
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Answer
It suggests possible management bias in estimates.
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