Define the fraud risk factors.

1. Define the fraud risk factors by providing some examples.

2. What are the main ways in which the management manipulation of earnings may occur?

3. What does the term ‘big bath behaviour’ mean and how does it affect the auditor’s opinion on financial statements?

4. With reference to auditing standards, what actions does the auditor take if he/she is unable to continue the audit engagement as a result of a misstatement related to suspected fraud?

Solution:

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