Identifying Trends in Over-Purchased And/or Obsolete Inventory Over Several Periods

question 4

Multiple Choice

Identifying trends in over-purchased and/or obsolete inventory over several periods is a proactive computer audit test that can be used to detect which of the following schemes?

• A) False purchases
• B) Corruption
• C) Overstated expenses
• D) None of the above

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity and/or borrowings of a company.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.

Net Cash

The balance of cash remaining once cash inflows and outflows have been reconciled.

Investing Activities

Financial transactions and events related to the acquisition or disposal of long-term assets and investments.