Question 1
Analytical procedures can be very effective in detecting inventory fraud. Which of the following analytical procedures would
not be useful in detecting fraud?
◦ gross margin percentage
◦ inventory turnover
◦ cost of sales percentage
◦ accounts receivable turnover
Question 2
Auditing standards specifically require auditors to identify ________ as a fraud risk in most audits.
◦ overstated assets
◦ understated liabilities
◦ revenue recognition
◦ overstated expenses