Auditor initial assessment of a potential client

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1. Based on an auditor's initial assessment of a potential client, the entity's financial statements appeared to be materially misstated over a period of years because revenue/income related journal entries were inappropriately posted to various accounts. The auditor would most likely have been alerted to this fraud by performing a revenue cutoff test at year-end.

True/False? Why?

2. Auditors anticipate placing reliance on controls to reduce the risk of material misstatement in an IT environment. Which of the following controls would the auditor initially focus on program controls or general controls. Why?

Reference no: EM13143462

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