QCISA 240 fraud concepts — correct/incorrect statements
0 marks easy
State with reasons (in short) whether the following statement is correct or incorrect:
Q1Definition of fraud under SA 240
0 marks easy
What do you understand by the term 'fraud'? Provide its meaning as given under the Standard on Auditing (SA) 240.
Q2Types of errors — self-revealing errors
0 marks easy
Briefly explain self-revealing errors with the help of some illustration.
Q3Cash defalcation — suppression of receipts techniques
0 marks easy
There are many ways for cash defalcation, one of which is suppressing cash receipts. List out few techniques of how the receipts are suppressed.
Q4Fraud risk factors — opportunities for fraudulent financial
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Fraud Risk Factors are the events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Further, the nature of the industry or the entity's operations also provides opportunities to engage in fraudulent financial reporting. List out some of the cases from where these opportunities may arise.
Q5Auditor withdrawal from engagement due to fraud — SA 240
0 marks easy
You notice a misstatement resulting from fraud or suspected fraud during the audit and conclude that it is not possible to continue the performance of audit. As a statutory Auditor, how would you deal?
Q6CARO 2016 — auditor's fraud reporting scope
0 marks easy
Explain the scope of a Company Auditor's enquiry on Fraud matters as enshrined in the Companies (Auditor's Report) Order, 2016.
Q7Auditor unable to continue engagement — steps under SA 240
0 marks easy
During the Statutory Audit of a Public Limited Company, XYZ Ltd., its auditor, Mr. Bajaj, the engagement partner of Bajaj Chopra & Associates, encounters some exceptional circumstances that bring into question his ability to continue performing the audit while suspecting a fraud arising from material misstatements. Explain the steps to be taken in such a case.
Q8Misappropriation of assets — inadequate internal controls
0 marks easy
Inadequate internal control over assets may increase the susceptibility of misappropriation of those assets. Enlist some examples of such circumstances.
Q9Cash receipt suppression techniques — fraud detection
0 marks easy
In an audit of Financial Statements of PQR Ltd., CA Vikas Khemka finds that the Cash receipts have been suppressed. Give examples of such techniques which may have led him to suspect this.
Q10Reasons/incentives for management and employee fraud
0 marks easy
Enlist the instances which induce Management/Employees to commit fraud.
Q11Management override of controls — fraudulent financial repor
0 marks easy
Fraudulent financial reporting often involves management override of controls that otherwise may appear to be operating effectively. Explain some techniques by which fraud can be committed by management overriding controls.