Which of the following statements are incorrect? multiple answers.

Compare two evidence collection strategies for a LOW risk client in the acquisition & payment cycle: (Strategy 1) analytical procedures + inquiry with management versus (Strategy 2) inspection of physical items + confirmation with external organizations True or False? Strategy 1 will be cheaper and will be of higher quality compared to Strategy 2. Strategy 2 will be more expensive but will be of lower quality compared to Strategy 1. 

The PCAOB has recently mandated that auditors are no longer allowed to use internet businesses such as confirmation.com to collect accounts receivable confirmations.

Coinbase Global, a prominent cryptocurrency trading platform, provides investors with the opportunity to buy and sell five different brands of cryptocurrency as of early November 2025. The brands include the two most common cryptocurrencies, Bitcoin and Ethereum, plus a rotating set of three lesser-known cryptocurrencies.

Evidence from within the client’s organization (such as the monthly bank reconciliation for a cash account) is considered to be more reliable than evidence from an independent outside source (such as a confirmation obtained directly from the bank).

To accomplish a (fraudulent) picture of steady and continued revenue growth, management at Under Armour used “pull forwards”, which involve paying exceptionally high sales commissions to salespeople to provide them with incentives to achieve revenue targets.

START COUNT HERE A non-GAAP financial measure is a numeric measure calculated and presented using a methodology that differs from GAAP; companies use non-GAAP measures to supplement GAAP disclosures to help users better understand the company’s performance.

Consider the following situation: The consensus analysts’ forecast for the company’s stock is equal to $5.06 per share. The earnings per share based on the unadjusted trial balance is $5.07. True or False? It is reasonable to expect conflict between management and the auditor about the validity of booking a 0.02 per share income decreasing adjusting entry to correct a detected misstatement.

Compare the following two conclusions based on sampling risks relevant to tests of controls:  Situation 1: The auditor assesses control risk based on sample evidence as LOW, and the actual state of controls is that they are EFFECTIVE. Situation 2: The auditor assesses control risk based on sample evidence as HIGH, and the actual state of controls is that they are INEFFECTIVE. True or False?  Situation 1 will result in an audit that is inefficient while Situation 2 will result in an audit that is ineffective.

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