Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is correct concerning required auditor communications about fraud?

Auditors are not required to communicate any fraud findings if they are immaterial.

Auditors only need to communicate fraud to management, not to those charged with governance.

Auditors are required to communicate all identified fraud to those charged with governance, regardless of materiality.

Auditors are only required to communicate fraud if it results in a material misstatement.

Previous problemNext problem

Verified step by step guidance

Understand the context of the question: The problem is about auditor responsibilities concerning fraud communication, which is a key concept in auditing and financial accounting.

Recall the principle that auditors have a duty to communicate all identified fraud, regardless of materiality, to those charged with governance. This ensures transparency and accountability in financial reporting.

Clarify the distinction between material and immaterial fraud: Material fraud affects the financial statements significantly, while immaterial fraud may not. However, auditors are required to report all fraud findings, irrespective of materiality.

Identify the parties involved: 'Management' refers to the executives running the company, while 'those charged with governance' refers to the board of directors or audit committee responsible for oversight. Auditors must communicate fraud findings to the latter group.

Conclude that the correct answer is: Auditors are required to communicate all identified fraud to those charged with governance, regardless of materiality. This aligns with professional auditing standards and ethical practices.