Which of the Following May Indicate Management Fraud

question 21

Multiple Choice

Which of the following may indicate management fraud?

• A) The name of a relative of a member of upper management is suggested to fill a board of directors' vacancy.
• B) Increases and decreases in inventory fluctuate from period to period.
• C) Inconsistencies exist between what management is telling the auditor and what the auditor observes.
• D) Several mistakes are discovered in the inventory records.

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Definitions:

Wholly Owned Subsidiary

A company whose entire share capital is held by another company.

Uniform Accounting Practices

Standardized accounting procedures and practices that ensure consistency and comparability across companies and industries.

Uniform Accounting Policies

Accounting standards and policies that are consistently applied across different entities within a group, ensuring comparability and transparency of financial statements.

Investee

An entity in which an investor holds a minority stake, without controlling interest.