Question

1. Insider trading is a fraud that causes financial statements to be misstated.

A. True B. False

2. The auditor's report must reference the auditing standards issued by the __________________ for audit opinion on the financial statements and internal controls of public companies.

3. Lack of segregation of duties increases the risk of fraud

A. True B. False

4.Employee fraud is generally committed by trusted employees.

A. True B. False

Answer 1

Ans -1 True, Insider trading is a fraud that causes financial statements to be misstated.this is true statement.Insider trading is that type of trading of a public company's stock or other securities based on material , nonpublic information about the company.

Ans -2 ,The auditor's report must reference the auditing standard issued by the International federation of accountant through the International auditing and assurance standards board for audit opinion on the financial statements and internal controls of public companies.

Ans -3 True, lack of segregation of duties increase the risk of fraud.when a single person does all the financial activity of business then he tries to manipulate accounts.hence segregation is good for removing fraud.

Ans -4 True, Employee fraud is generally committed by trusted employees.because these employees knows about the company's every confidential information and they also know about weakness and strength of company.as they are long term employees they tries to get faith of employer.