Question

1. What is fraud triangle, examples on each item
2. What is professional skepticism
3. What is the role of audit committee
4. What type of activity is most susceptible to fraud

Answer 1

Fraud Triangle is a framework commonly used in auditing to explain the motivation behind an individuals decision to commit fraud.Examples of Fraud triangle is pressure to maintain high standard of living,pay off debt from credit cards,medical bills or gambling.

Professional skepticism is an attitude that includes questioning of mind and a critical assesement of appropriateness and sufficiency of audit evidence.Profesional care,which is closely linked to profesional skepticism,is critical during planning and performance.

The primary purpose of a companys audit comitee is to provide oversight of the financial reporting process.Audit committeis reponsibel for appointing an Auditor and also defining their scope.Audit committe is also reponsible for compensation of auditor.