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Under ISA 240 The Auditor's Responsibilities Relating to Fraud, there is a presumption that revenue recognition involves a risk of fraud. In which situation is the auditor PERMITTED to rebut this presumption?

When the company has strong internal controls over revenue When the revenue streams are simple and predictable, and the auditor has documented the basis for rebuttal When management asserts that no fraud has occurred The presumption can never be rebutted under any circumstances

Correct Answer:

When the revenue streams are simple and predictable, and the auditor has documented the basis for rebuttal

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