AAA Ethics and fraud

Which of these is a fundamental ethical principle?

• 1 Independence of mind only
• 2 Objectivity
• 3 Profitability
• 4 Reliability

The audit firm audits a client and also prepares its accounting records and financial statements. The main threat is:

• 1 Intimidation
• 2 Advocacy
• 3 Familiarity
• 4 Self-review

An audit senior has just received a significant gift from the audit client. The main threat is:

• 1 Self-review
• 2 Familiarity
• 3 Advocacy
• 4 Self-interest

An audit partner has been the partner on the audit of a listed client for many years and has a close relationship with its finance director. The main threat is:

• 1 Advocacy
• 2 Familiarity
• 3 Self-review
• 4 Self-interest

The three conditions in the fraud triangle are:

• 1 Intent, act and concealment
• 2 Opportunity, pressure and rationalisation
• 3 Cost, benefit and risk
• 4 Detection, prevention and response

The auditor's responsibility for fraud is:

• 1 None
• 2 To prevent all fraud
• 3 To obtain reasonable assurance that the financial statements are free from material misstatement, whether from fraud or error
• 4 To detect all fraud

Safeguards against an independence threat include:

• 1 Ignoring it when the fee is small
• 2 Not documenting
• 3 Giving the client a discount
• 4 Using a separate team for non-audit work and review by a partner not on the audit