Which of the following is not an inquiry the auditor should make to identify the risks of material misstatement due to fraud?
A.
How management communicates to employees its views on acceptable business practices.
B.
Whether operating personnel have communicated to management regarding internal control and how it functions to prevent, deter, or detect material misstatement due to fraud.
C.
Whether there are any particular business segments for which a risk of fraud may be more likely to exist.
D.
Whether management is aware of any allegations of fraud.
Suggested Answer:B🗳️
Choice "B" is correct. The auditor should inquire whether management (not operating personnel) has communicated to those charged with governance (not management) regarding internal control and how it functions to prevent, deter, or detect material misstatement due to fraud. Choice "A" is incorrect. The auditor should inquire how management communicates to employees its views on acceptable business practices. Choice "C" is incorrect. The auditor should inquire whether there are any particular business segments for which a risk of fraud may be more likely to exist. Choice "D" is incorrect. The auditor should inquire whether management is aware of any allegations of fraud.
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