P - Fraud Risk Inquiries
P - Fraud Risk Inquiries
P - Fraud Risk Inquiries
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Inquiries Response
a) Questions to understand historical
frauds perpetrated and the
management's commitment
regarding fraud prevention,
deterrence, and detection.
Do you have any knowledge of any We do not know about any fraud perpetrated or
fraud perpetrated or alleged or alleged or suspected that could result in a material
suspected that could result in a material misstatement of the entity's financial statements.
misstatement of the entity's financial
statements?
Do you have any knowledge of any We do not know about any other fraud, regardless
other fraud, regardless of materiality, of materiality, perpetrated, or any alleged or
perpetrated, or any alleged or suspected suspected fraud.
fraud?
Have you received any letters or We have not received any letters or
communications from employees, communications from employees, former
former employees, analysts, short- employees, analysts, short-sellers, or others
sellers, or others concerning allegations concerning allegations of fraud.
of fraud?
In the past, what kinds of frauds have Not applicable, as no frauds have been committed
been committed against the entity by in the past.
employees or executives, including
defalcations and employee thefts? (For
a new client)
What incentives and pressures do you There is no such pressure on the management to
perceive to be on management and how increase profit as the company is in the trading
are the related fraud risks managed? business which requires the satisfaction of
customers to whom sales are made as per
respective demand. However after recovery from
Covid last year, Management had a goal to try and
increase profitability which might proved to be a
perceived incentive to commit fraud.
Not applicable, as no fraud has yet been identified.
Where fraud or potential fraud is
identified, how is the matter
investigated and remediated?
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Inquiries Response
b) Questions to gain an understanding of
management’s fraud risk assessment
and related controls.
• What is your understanding about the
risks of fraud in the entity, including • There have been no instances of fraud in the
any specific fraud risks the entity has past although there is a risk of fraud in revenue
identified or any account balances or recognition for which substantive audit procedures
classes of transactions for which a risk
shall be performed at a later stage.
of fraud may be more likely to exist,
and why?
• Are you aware of any inappropriate or • We are not aware of any inappropriate or
unusual activity relating to the unusual activity relating to the processing of journal
processing of journal entries and other entries and other adjustments
adjustments?
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