[misanthrope87]

So here’s a question:

Which of the following situations represents a risk factor that relates to misstatements arising from misappropriation of assets?

Answer : Lack of independent checks.

What are independent checks?? And why would it be a risk factor??

B 2/12 87
A 11/11 90
R 8/11 86
F 5/12 88

[Anonymous]

I think lack of independent checks means that there aren't any checks / balances, so someone could do whatever he wanted without anyone knowing because no one reviews what he's doing. So he could steal inventory and no one would know b/c no one counts the inventory or reviews inventory transactions / write-offs.

[Yvonne570]

I agree. Misappropriation of assets is considered a fraud scheme involving theft – often from employees at a lower level.

If independent checks are not in place, this gives the culprit an opportunity to take advantage.

AUD - Passed:)
FAR - Passed:)
REG - Retake TBD
BEC - Missed by 3 points Retake TBD

[KasiaS]

When you see independent checks, think segregation of duties. If you don't separate custody, authorization, and recording, then it's open season for theft.

FAR 88 (07/15/11)
BEC 83 (08/31/11)
AUD 81 (10/15/11)
REG 83 (11/26/11)

Used NIU Correspondence CPA Review

[misanthrope87]

Thank you! And here I thought they meant actual paper checks. How embarrassing.

B 2/12 87
A 11/11 90
R 8/11 86
F 5/12 88

[Anonymous]

Bump.

[Author]

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