Question

e O Which of the following is not part of management's fraud risk assessment process? a. Fraud risk assessments serve as an important basis for determining the control activities needed to mitigate fraud risks. b. The assessment considers the role of the external auditor in preventing fraud. c. The assessment considers ways the fraud could occur d. The assessment considers pressures that might lead to fraud in the financial statements O

Answer 1

The answer is Option (b)

The assessment considers the role of the external auditor in preventing fraud.

Management's fraud risk assessment is solely the responsibility of the management. It cannot define and consider the role of the external auditor in preventing fraud. Auditor's role and responsibilities are defined while the appointment of the auditor is made in the engagement letter. Fraud risk assessment nothing to do with the role of the auditor.

The Following options will not be correct because of this reasons-

Option (A)

To detect and mitigate fraud risk different types of control measures are taken by the organisation. Such as internal control on payment of cash etc. to verify the effectiveness and if there is any modification is needed or not in control activities to prevent fraud management conduct fraud risk management. So, Option(A) is a part of Fraud Risk Management.

Option(C)

In Fraud Risk Management management wants to anticipate by which ways a fraud can be taken place in an organisation. So this is also a part of Fraud Risk Management.

Option (D)

In Fraud Risk Management the management also wats to know the situation or the factors or personal interest which can influence to do fraud. So, this also a part of Fraud Risk Management.