Short Essay Answers (5 percent each): Select and answer one prompt and one prompt only below for each chapter. Three to four sentences are sufficient. Chapter 5: 1. Why is materiality one of the most difficult judgments to make in auditing financial statements?

All of the following tend to be rationalizations (not opportunity or pressure) for fraud except:

Chapter 5: 2. Explain each of the three sides of the fraud triangle with respect to how it contributes toward the possibility that fraud in the financial statements may be present. Are there differences with respect to how each element might influence occupational fraud and fraudulent financial statements? Explain.  

The main difference between a discretionary and nondiscretionary accrual is:

Ethical conflicts for CPAs in business can occur when:

The Private Securities Litigation Reform Act (PSLRA) imposes additional requirements on public companies reporting to the SEC and their auditors when:

All of the following are examples of “recording revenue too soon or of questionable quality” except:

Which of the following is not a motivation to manage earnings?

The purpose of the fraud triangle is to identify:

Motivations to smooth net income over time include each of the following except: