AUI3703_2016___2018_exam_pack_Solutions

It constitutes fraud; Reasons: There is mispresentation of facts by Jak Daniel when he claims that he receives full quantity when in reality he receives shirt deliveries. There is prejudice when Jack Daniel decides to enjoy an unfair advantage over the company. This is an intentional act against the law that enables Jack Daniel and the driver to enjoy an unfair advantage from the company. 6.2. What is internal auditor’s responsibility regarding the detection of fraud (2) Answer Z To identify sufficient indications that fraud has taken place through audit tests. •/ To exercise professional competence and due care when gathering evidence in order to come up with reliable evidence. Z To have sufficient knowledge of the fraud to be able to identify the signs that point to the existence of fraud. Z To be alert to conditions such as weaknesses in internal control that could allow fraud to be committed Z To have knowledge of the procedures that should be followed when there is any suspicion that has taken place. AUI3703 MAY JUNE 2018